What would the slope and y-intercept represent

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Problem 1. An account with an initial value of $1000 earns 10% interest per year.

a) If the account earns simple interest, what would the graph of amount versus time look like? What would the slope and y-intercept represent?

b) If the account earns compound interest, what would the graph of amount versus time look like? What would the y-intercept represent?

Problem 2. Explain the advantage of using compound interest over simple interest, from an investor's point of view. Use an example to illustrate your answer.

Problem 3. Explain how the calculations of simple and compound interest are related to functions and sequences.

Reference no: EM132777173

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