26. You can invest in an account that pays simple interest or an account that pays...

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26. You can invest in an account that pays simple interest or anaccount that pays compound interest. In either case, you plan toinvest $3,900 today and both accounts have an annual interest rateof 5 percent. How much more interest will you receive in the 11thyear in the account that pays compound interest?
27. You want to buy a house and will need to borrow $240,000.The interest rate on your loan is 5.71 percent compounded monthlyand the loan is for 25 years. What are your monthly mortgagepayments?

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Answer 26 Calculation of interest paid in 11th Year using Compound interest Interest paid in 11th Year using Compound Interest Value of Investment at the end of 10th year x Interest rate Value of investment at the end of 10th See Answer

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26. You can invest in an account that pays simple interest or anaccount that pays compound interest. In either case, you plan toinvest $3,900 today and both accounts have an annual interest rateof 5 percent. How much more interest will you receive in the 11thyear in the account that pays compound interest?27. You want to buy a house and will need to borrow $240,000.The interest rate on your loan is 5.71 percent compounded monthlyand the loan is for 25 years. What are your monthly mortgagepayments?