Questions and Problems

Basic

(Questions 1-15)

1. Simple Interest versus Compound Interest First Tappan Bank pays 5 percent simple interest on its savings account balances, whereas First Mullineaux Bank pays 5 percent interest compounded annually. If you made a $5,000 deposit in each bank, how much more money would you earn from your First Mullineaux Bank account at the end of 10 years?

2. Calculating Future Values For each of the following, compute the future value:

Present Value

Years

Interest Rate

Future Value

$ 2,250

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