How much interest on interest was earned

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Reference no: EM131855661

1. An account was opened with $2,000 10 years ago. Today, the account balance is $2,600. If the account paid interest compounded annually, how much interest on interest was earned?

a) $64.60

b) $67.81

c) $68.33

d) $70.58

e) $71.67

2. A company is considering a new four-year project with an initial investment requirement of $75,000. The equipment will be depreciated straight-line to zero over the life of the project and will be worthless at the end of the project. Sales are estimated at $142,000 with costs of $88,200. The tax rate is 34%. What is the project OCF?

a) $28,394

b) $30,506

c) $37,900

d) 39,394

e) 41,883

Reference no: EM131855661

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