Question

You invest $500 at 10 percent interest per annum. at the end of 2 years with simple interest you will have ____ and with compound interest you will have ____.

Answer 1

If you invest $500 at 10 percent interest per annum. at the end of 2 years with simple interest you will have $600 and with compound interest you will have $605.

Simple interest and compound interest

We would be making use of financial calculator to find the compound interest by inputting the below data:

Present value=PV = -500 (ouflow)

Number of years=N = 2

Interest=I/Y = 10

Face value=?

Hence:

CPT FV = 605

Compound Interest = $605

Simple interest:

Simple Interest = $500+[2 x ($500x0.10)]

Simple interest=$500+(2×$50)

Simple Interest =$500+100

Simple interest =$600

Therefore If you invest $500 at 10 percent interest per annum. at the end of 2 years with simple interest you will have $600 and with compound interest you will have $605.

Learn more about Simple interest and compound interest here:brainly.com/question/20406888

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