compounded weekly. If the original amount deposited was \( \$ 500 \), how much interest will she have earned after 10 years? \( P=50500(1.00 .0653846)^{520} \) \( R=0.034 \) \( A=52 \) \( t=10 \) 10. Mr. and Mrs. Rainer took out a \( \$ 240,000 \) loan to purchase their home. If the interest rate on the loan is \( 1.2 \% \) compounded bimonthly, how much interest will they have paid after 30 years? \( P=240,000 \quad A= \)
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Extra Insights
Did you know that the concept of compound interest dates back to ancient civilizations? The Babylonians were among the first to use a system of interest in the form of loans, which evolved into the complex financial systems we see today. The magic of compounding allows for money to grow exponentially over time, turning even a modest initial investment into a substantial sum if held long enough. Think of it as planting a tree; the longer you nurture it, the larger and more fruitful it becomes! In the real world, understanding compounding can dramatically influence how we approach saving and investing. For instance, if Mr. and Mrs. Rainer were to invest their loan payments into a high-yield savings account instead, they could potentially earn money rather than just pay interest. This strategy of prioritizing investments—however small—can significantly improve one’s financial health and security over decades. Remember, every bit counts when you give it enough time to grow!
