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
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
Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Introduction to Finance

This quiz test introductory finance topics.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Operations Management

This quiz tests a student's knowledge about Operations Management

Understanding Management

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