A friend plans to buy a big screen TV, and can afford to set aside
$1,320.00 toward the purchase today.  If your friend can earn 5.0%,
how much can your friend spend in 4 years on the purchase?  Round off
to the nearest dollar.

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Request for Question Clarification by legolas-ga on 22 Jan 2003 11:37 PST

5% per year, compounded or simple interest?

Hi k9queen-ga,

I'll just give both:

Compounded monthly, at 5% per year, your friend will have $1611.59.

Simple interst, at 5% per year, with the 5% not being paid on the interest $1584.00

Thanks!

Legolas-ga

Great answer! Thank you, and very fast response!