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P3-1. You have $1,500 to invest today at 7 percent interest compounded annually.
a. How much will you have accumulated in the account at the end of the following number of
years?
1. Three years
2. Six years
3. Nine years.
b. Use your findings in part (a) to calculate the amount of interest earned in:
1. the first three years (years 1 to 3)
2. the second three years (years 3 to 6)
3. the third three years (years 6 to 9).
c. Compare and contrast your findings in part (b). Explain why the amount of interest earned
in-creases in each succeeding 3-year period.
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Solution Summary
The solution provides a detailed step-by-step explanation on how much money will be accumulated at the end of 3,6, and 9 years as well as the amount of interest earned.
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