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Annual simple interest

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Reference no: EM131301300

Explain which of the two options below results in a lower balance after 6 months on an investment of $6,000. Annual simple interest of 12% applied at the end of 6 months. A monthly interest rate of 1% applied at the end of each month and before the start ofthe next month. (Compound interest at 12% per year, compounded monthly.) Discuss why the two methods result in different results. In what circumstances might you select one option over another?

Reference no: EM131301300

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