meredith48034
Answered

If you have $200 to invest for 10 years, would you rather invest your money in a bank that pays 70% simple interest or 5% interest compounded annually?​

Answer :

you do 200 times .07 Times .05 ten times
tramserran

Answer: Simple Interest

Step-by-step explanation:

Notes:

  • A is the Accrued amount (total)
  • P is the Principal amount (initial investment)
  • r is the interest Rate (convert percent to a decimal)
  • t is the Time of the investment (in years)

We are given; P = 200, r = 70% (.7), t = 10

*******************************************************************************

Simple Interest formula:   A = P + Prt

                                            A = 200 + 200(.7)(10)

                                            A = 1600.00

Compound Interest formula:   [tex]A=P(1+r)^t[/tex]    

                                                    A = 200(1 + .05)¹⁰

                                                    A = 325.78

The $200 investment will result in a larger accrued amount if invested in the bank that pays 70% simple interest.

Other Questions