What will be the investment if security pays simple interest


Problem: If Steve invests $5,000 in an interest bearing security paying 10% per year for 5 years, what will his investment be worth:

1) If the security pays simple interest?

2) If the security pays interest compounded annually?

3) How much simple interest is earned over the life of the investment?

4) How much compound interest is earned over the life of the investment?

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Finance Basics: What will be the investment if security pays simple interest
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