Quiz Ch 05 – Comparing Interest Earnings of Two Depositors

Fundamentals of Corporate Finance

Ross, Westerfield, and Jordan

13th Edition

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Clayton deposited $2,500 into an account that pays 5 percent interest, compounded annually, and plans to withdraw his interest earnings immediately. Jayda deposited $2,500 at 5 percent interest, compounded annually, and will reinvest her interest earnings. Who will earn more interest in Year 1?

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