Show all support work for your calculations.
1. Simple Interest versus Compound Interest [LO1] First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of nine years?
2. Calculating Future Values [LO1] For each of the following, compute the future value:
|
Present Value
|
Years
|
Interest Rate
|
Future Value
|
|
$ 2,250
|
11
|
13%
|
|
|
8,752
|
7
|
9%
|
|
|
76,355
|
14
|
12%
|
|
|
183,796
|
8
|
6%
|
|