midencesantos790
Answered

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Suri and Carter want to start saving for the future. they each invest $4,000 into a certificate of deposit account. suri's investment earns 3% interest compounded annually. Carter's investment is 3% simple interest. ​

Sagot :

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Two formulas:

Compound interest - A = P(1 + r/n)^nt

Simple interest = A = P(1 + rt)

A - final amount

P - initial principal balance

r - interest rate

n - number of times interest applied per time period

t - number of time periods elapsed

Suri --

A = 4,000(1+0.03/1)^5

A = $4,637.09

Carter --

A = 4,000(1+0.03*5)

A = $4,600

In 5 years, Suri makes $37.09 more than Carter

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