Answer:
A) P = 240
B) P + Po = 1040
C) P = 270.58
D) P+Po = 1070.58
E) Option B (compound interest) is better, as it generates more interest for the same inicial value, rate of interest and time
Step-by-step explanation:
The formula for simple interest is:
P = Po*r*t
Where P is the interest earned, Po is the inicial value, r is the rate of interest and t is the time.
The formula for compound interest is:
P+Po = Po*(1+r)^t
So we have that:
A) P = 800*0.06*5 = 240
B) P + Po = 800 + 240 = 1040
C) P+Po = 800*(1+0.06)^5 = 1070.58 -> P = 1070.58 - 800 = 270.58
D) P+Po = 1070.58
E) Option B (compound interest) is better, as it generates more interest for the same inicial value, rate of interest and time
