If interest is compounded annually, €100 placed in a bank account earning 10 percent interest should generate €30 interest after three years.

Name: If interest is compounded annually, €100 placed in a bank account earning 10 percent interest should generate €30 interest after three years.
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Question

Quizplus · Accepted Answer

When interest is compounded annually at 10%, the interest is calculated on the new balance each year. After three years, the interest generated would be €33.10, not €30.

If Interest Is Compounded Annually, €100 Placed in a Bank