You invest 1000 in a certificate of deposit that matures

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You invest $1,000 in a certificate of deposit that matures after 10 years and pays 5 percent interest, which is compounded annually until the certificate matures.

a. How much interest will the saver earn if the interest is left to accumulate?

b. How much interest will the saver earn if the interest is with drawn each year?

c. Why are the answers to a and b different?

Reference no: EM13482093

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