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Llanis Llanis
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4 years ago
Suppose $100 is deposited in a bank account paying 5% compounded annually. If the interest earned is X after 5 years, then the interest earned will be 2X after 10 years.
True or False? Provide an explanation.
Textbook 

Microeconomics


Edition: 6th
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TecShdwTecShdw
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4 years ago
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More questions for this book are available here
False. Because of compounding, the balance on which interest is earned grows over time. Thus, the interest earned in years 6 to 10 will exceed the interest earned in years 1 to 5.
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Llanis Author
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This calls for a celebration Person Raising Both Hands in Celebration
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this is exactly what I needed
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Good timing, thanks!
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