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1) According to the table, what has the investor done with money earned through interest?
2) From looking at the table, explain the concept of compound interest.
3) According to the table, if the interest rate on this account were 10 percent, how much money would you have in the account at the end of the first year?
4) According to the table, if you added $50 to this account every year, what effect would it have on the interest rate that you earned?
According to the table, the investment has doubled in worth by the start of which year?
Table:
Start of Year Principal Amount Interest earned at 5% Principal at end of year
- $100 $5 $105
1 $105 $5.25 $110
2 $110.25 $5.51 $115.76
3 $115.76 $5.79 $121.55
4 $121.55 $6.08 $127.63

And it just follows that pattern

Respuesta :

isaacdavis1129
It looks like the table is not linear, so that means it would be exponential.
A)  It looks like the investor has been saving his income.
B) Compound interest is the income of money, or an investor in this case, as an exponential chart.
C) Concluding that the numbers on the bottom (1, 2, 3, and 4) counts for months, and if it increasing by 10 percent, then it would probably be around 220 dollars, for the sake of estimation
D) If you have added 50 dollars, it would change by much more than 50 dollars. In fact, it would change by about 200 dollars by the end of the year!
Contact me on my page if i was incorrect about anything
Parrain

Based on the given figures in the table, the following are true:

  • 1. Reinvested the interest.
  • 2. Compound interest gives interest on the interest already earned.
  • 3. $110
  • 4. Rate remains unchanged.
  • 5. 14th year.

The investor according to the table, reinvested the interest they earned back into the account so that they would make interest on that additional interest as well. This is how the concept of compound interest works.

If the rate was 10%, the money in the account would have been:

= 100 x ( 1 + 10%)

= $110

The rate is 5% and this will not change regardless of the $50 added. The interest earned will however increase.

The initial investment was $100 and this became $207.90 at the end of the 14th year. This means that the amount doubled to $200 sometime during the 14th year.

In conclusion, compound interest grants interest on interest.

Find out more about compound interest at https://brainly.com/question/1570054.

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