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Author Question: ________ is simply the interest earned in subsequent periods on the interest earned in prior ... (Read 173 times)

lb_gilbert

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on: Jul 10, 2018
________ is simply the interest earned in subsequent periods on the interest earned in prior periods.
 
  A) Quoted interest
  B) Anticipated interest
  C) Simple interest
  D) Compound interest

Question 2

An investment of 100 today is worth 116.64 at the end of two years if it earns an annual interest rate of 8. How much interest is earned in the first year and how much in the second year of this investment?
 
  A) The interest earned in year one is 8.32 and the interest earned in year two is 8.32.
  B) The interest earned in year one is 8.00 and the interest earned in year two is 8.64.
  C) The interest earned in year one is 8.64 and the interest earned in year two is 8.00.
  D) There is not enough information to solve this problem.


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Perkypinki

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: D

Answer to Question 2

Answer: B
Explanation: B) FV = PV  (1 + r)n = 100  (1.08)1 - 100 = 8.00 and
108(1.08)1 - 108 = 8.64


lb_gilbert

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Reply 2 on: Jul 10, 2018
Excellent

Liddy

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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