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Sagot :
Answer:
Compound interest: A = $1824.98
Simple interest: A = $1800
Explanation:
To know the balance after t years for an account that pays with a compounded rate, we can use the following equation:
[tex]A=P(1+r)^t[/tex]Where P is the initial amount and r is the interest rate.
So, replacing P by $1500, r by 4% or 0.04, and t by 5 years, we get:
[tex]\begin{gathered} A=1500(1+0.04)^5 \\ A=1500(1.04)^5 \\ A=1824.98 \end{gathered}[/tex]Therefore, in this case, the balance after 5 years is $1824.98
On the other hand, the balance after t years for an account that pays with a simple interest rate can be calculated as:
[tex]A=P(1+rt)[/tex]So, replacing P by $1500, r by 0.04, and t by 5 years, we get:
[tex]\begin{gathered} A=1500(1+0.04\cdot5) \\ A=1500(1+0.2) \\ A=1500(1.2) \\ A=1800 \end{gathered}[/tex]Then, the balance after 5 years is $1800
So, the answers are:
Compound interest: A = $1824.98
Simple interest: A = $1800
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