Solution-Calculate the principal plus interest at the end

Calculate the principal plus interest at the end

Reference no: EM132853811

Question - Sue has $10,000 to invest for four years. She intends to reinvest the interest at the end of each year so the funds will accumulate for a holiday at the end of the four years. Using an Excel workbook, show the following calculations:

Required -

a) Calculate the principal plus interest at the end of each of the four years if the money is invested at 8% per annum and calculated on a simple interest basis.

b) Calculate the principal plus interest at the end of each of the four years if the money is invested at 8% per annum and calculated on a compound interest basis and compounded annually.

c) Explain why she has a higher closing balance if she chooses the compound interest method.

Reference no: EM132853811

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Calculate the principal plus interest at the end

Reference no: EM132853811

Reference no: EM132853811

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