Answered

Westonci.ca is the premier destination for reliable answers to your questions, provided by a community of experts. Ask your questions and receive detailed answers from professionals with extensive experience in various fields. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

If you have a choice to earn simple interest on $10,000 for three years at 8% or annually compounded interest at 7% for three years which one will pay more and by how much approximately?

a. Simple interest by $50.00
b. Compound interest by $22.97
c. Compound interest by $150.75
d. Compound interest by $150.00
e. None of the above.

Sagot :

ogorwyne

Answer:

e. non of the above

Explanation:

we first find the simple interest

= p * r * t

= 10000*8%*3

= 2400

the future value

= 2400 + 10000

= 12400

we find the compound interest

= 10000*(1+r)^n

= 10000(1+7%)³

= 10000*1.225043

= 12250.43

we can see that it pays more at 12400 compared to compound interest of  12250.43

the difference = 12400 - 12250.43

= 149.57

therefore the answer is e

Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. We appreciate your time. Please come back anytime for the latest information and answers to your questions. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.