Investigate the difference between compounding annually and simple interest

for parts a-j. Round to the nearest cent.

a. Find the simple interest for a 1-year CD for $5,000 at a 2.5% interest rate.

b. Find the interest for a 1-year CD for $5,000 at an interest rate of 2.5%,

compounded annually.

c. Compare the results from parts a and b.

d. Find the simple interest for a 3-year CD for $5,000 at an interest rate

of 2.5%.

e. Find the interest for a 3-year CD for $5,000 at an interest rate of 2.5%,

compounded annually.

f. Compare the results from parts d and e.

g. Find the simple interest for a 6-year CD for $5,000 at an interest rate of 2%.

h. Find the interest for a 6-year CD for $5,000 at an interest rate of 2%,

compounded annually.

i. Compare the results from parts g and h.

j. Is interest compounded annually the same as simple interest? Explain

Answers

Answer 1

Step-by-step explanation:

Simple interest formula

[tex]A = P (1 + rt)[/tex]

Compound interest formula

[tex]A = P(1 + \frac{r}{n})^{nt}[/tex]

a.

[tex]A = 5000 (1 + 0.025*1)\\A=5000(1.025)\\A=5125[/tex]

Simple interest is $125

b

. [tex]A = 5000 (1 + \frac{0.025}{1})^{1*1} \\A=5000(1.025)\\A= 5125[/tex]

Compound interest is $125

c. the result for both a and b are the same

d.

[tex]A = 5000 (1 + 0.025*3) \\A=5000(1.075) \\A=5375[/tex]

the simple interest is $375

e

. [tex]A = 5000 (1 + \frac{0.025}{1})^{1*3}] \\A=5000(1.025)^3 \\A=5000(1.077)\\A= 5385[/tex]

the compound interest is $385

f. the result compared, compound interest is $10 more than simple interest

g.

[tex]A = 5000 (1 + 0.02*6) \\A=5000(1.12) \\A=5600[/tex]

the simple interest is $600

h.

[tex]A = 5000 (1 + \frac{0.02}{1})^{1*6}] \\A=5000(1.12)^6 \\A=5000(1.9738) \\A= 9869[/tex]

the compound interest is $4869

i. the result from g and h, h is over 8 times bigger than g.

j. interest compound annually is not the same as simple interest, only for the case of a and b seeing that it is for 1 year. but for 2years and above there is difference as seen in c to h


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1 pts
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Answers

Answer:

$136.50

Step-by-step explanation:

Time and a half = 13.00 + (13 × 1/2)

Time and a half = 13.00 + 6.50

Time and a half = $19.50

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Step-by-step explanation:

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Answer:

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Step-by-step explanation:

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Answer:

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Answer:

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Step-by-step explanation:

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Answer:

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Step-by-step explanation:

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Step-by-step explanation:

Answer:

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[tex]\mathfrak{\huge{\pink{\underline{\underline{AnSwEr:-}}}}}[/tex]

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Answers

Answer:

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Answer:

5

Step-by-step explanation:

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Answers

Explicación paso a paso:

Como no dijimos qué calcular, también podemos encontrar el tiempo que tarda el automóvil en viajar por la carretera.

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Dado

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Sustituir

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Answer:

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Number 9# answer is 8/5 (or 1 and 3/5)

Number 10# is 36/19 (or 1 and 17/19)

Number 11# is 35/19 (or 1 and 16/19)

Number 12# is 22/63

Number 13# is 176/39 (or 4 and 20/39)

Number 14# is 306/145 (or 2 and 16/145)

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Step-by-step explanation:

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Step-by-step explanation:

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