Answered

Westonci.ca is the premier destination for reliable answers to your questions, provided by a community of experts. Get quick and reliable solutions to your questions from a community of experienced professionals on our platform. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

Bethany needs to borrow $10,000. She can borrow the money at 6% simple interest for 5 yr or she can borrow at 5% with interest compounded continuously for 5 yr.

a. How much total interest would Bethany pay at 6% simple interest?
b. How much total interest would Bethany pay at 5% interest compounded continuously?
c. Which option results in less total interest?

Sagot :

Answer:

a. $3000

b. 2840.25

c. compounded continuously

Explanation:

a. principal amount,  p = $10000

Interest rate in the case of simple interest = 6%

Time, t = 5 years

Interest amount = Prt

Interest amount = 10000 x 6% x 5 = $3000

b. principal amount,  p = $10000

Interest rate, r = 5%

Time, t = 5 years

Interest amount = Pe^(rt) - P

Interest amount = 10000 (2.71)^(5% x 5) - 10000

Interest amount = 2840.25

c. Compounded continuously has a lower interest amount.

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. We're glad you visited Westonci.ca. Return anytime for updated answers from our knowledgeable team.