Purchase Solution

Simple and Compound Interest Transactions.

Not what you're looking for?

Ask Custom Question

Hi please help with the following problems.

Over a period of years, an investment in an account which pays 6 percent simple interest will:
a. earn the same dollar amount of income as an account returning 7 percent simple
interest.
b. earn more income than an account paying 6 percent compound interest.
c. increase in value at the same rate as any other account paying 6 percent interest,
regardless of how the interest is compounded.
d. pay an increasing amount of income each year due to the effects of interest on interest.
e. increase in value less than an account which pays 6 percent compound interest.

A financially wise individual would prefer a loan based on __________ interest and an investment earning __________ interest.
a. compound; compound
b. compound; simple
c. simple; compound
d. simple; simple
e. complex; compound

Purchase this Solution

Solution Summary

This file contains a formatted MS Word file containing examples and illustrations of the effect of simple and compound interest transactions.

Solution Preview

For your convenience, I have attached an MS Word file containing the text below:

Simple Interest

1. Over a period of years, an investment in an account which pays 6 percent simple interest will:

a. Earn the same dollar amount of ...

Purchase this Solution


Free BrainMass Quizzes
Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.