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Jacqui decided to invest some of the profit she made (the selling price minus the inflated amount) into a compound interest account for 3.5 years. The account will earn 8.4% per annum. (b) How much interest does she earn if she invested $5000 which compounded: (i) annually? (ii) monthly?

 May 13, 2020
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Annual compounding

 

5000( 1+.084)^(3.5)  ≈ $6630.90

 

Monthly compounding

 

5000(1 + .084/12)^(12 * 3.5)  ≈ $6702.05

 

cool cool cool

 May 13, 2020

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