Your brother invested RM5,000 twenty years ago with an insurance company that paid him 5 percent simple interest on his funds. You invested RM5,000 twenty years ago in a fund that has paid you 5 percent interest, compounded annually. Who will earn more and why? By how much?

Your brother invested RM5,000 twenty years ago with an insurance company that paid him 5 percent simple interest on his funds. You invested RM5,000 twenty years ago in a fund that has paid you 5 percent interest, compounded annually. Who will earn more and why? By how much?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 39P

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Concept explainers

Reasons for Estate Planning

Planning is a process that helps decide in advance about future activities and operations. Planning helps to draft the procedures by identifying, analyzing, and designing how to work, when to work, by whom should be done, and what has to be done. It is the primary step followed by a person, business organizations, institutions, companies, etc.

Question

Your brother invested RM5,000 twenty years ago with an insurance company that paid him
5 percent simple interest on his funds. You invested RM5,000 twenty years ago in a fund
that has paid you 5 percent interest, compounded annually. Who will earn more and why?
By how much?

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