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    How does compounding work? Show in Excel.

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    17. Compound Interest. Old Time Savings Bank pays 4 percent interest on its savings accounts. If you deposit $1,000 in the bank and leave it there, how much interest will you earn in the first year? The second year? The tenth year?

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    Solution Preview

    Please see the attached Excel file. Your whole question is explained there. The basic issue with compound interest is that we keep adding the interest ...

    Solution Summary

    Compounding is illustrated in Excel.

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