Question 14 of 20 :
1 answer:
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Answer:
B is correct.
Step-by-step explanation:
Compound Interest Formula:
Tasha invests in two ways
Case 1:
- Principal P=$5,000
- Rate of Interest r=0.06
- Time t=t
- n=1
Case 2:
- Principal P=$5,000
- Rate of Interest r=0.08
- Time t=1
- n=1
Total amount yield by Tasha =
Thomas Investment
- Principal P=$10,000
- Rate r= 0.07
- t=t
- n=1
Total amount yield by Thomas =
Now we make table for Tasha and Thomas different value of t
t Tasha Thomas
1 $10,700 $10,700
2 $11,450 $11,449
3 $12,254 $12,250
4 $13,115 $13,108
In table we can see Tasha investment will yield more from Thomas.
Thus, Tasha’s investment will yield more over many years because the amount invested at 8% causes the overall total to increase faster.