The Amount of $6,000 Is Invested at 5% for 3

question 18

Essay

The amount of $6,000 is invested at 5% for 3 years.
a. Compute the ending balance if the bank calculates simple interest.
b. Compute the ending balance if the bank calculates interest compounded annually.
c. How much more interest is earned in the account with compound interest?

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Definitions:

Selling Price

The amount of money charged for a product or service, or the sum obtained from the sale of an asset.

Receivables

Money owed to a company by customers for goods or services that have been delivered or used but not yet paid for.

Ending Cash Balance

The amount of cash a company has available at the end of a financial period.

Sales

The total amount generated from selling goods or services over a specific period of time.