You are given a choice of taking the simple interest on $10,000 invested for 2 years at a rate of 3% or the interest on $100,

Question

3 years ago

9

You are given a choice of taking the simple interest on $10,000 invested for 2 years at a rate of 3% or the interest on $100,

000 invested for 2 years at an interest rate of 3% compounded daily (use the Banker's rule ).
Which investment earns the greater amount of interest?
Give the difference between the amounts of interest earned by the two investments.

Mathematics

1 answer:

attashe74 [19] · Answer 1 · 2021-12-10T21:05:36+03:00

Answer:

Compount interest earns more. Difference between 2 interest is $92 445.39

Step-by-step explanation:

Simple Interest:

$I = \frac{prt}{100}$

p = $10000

r = 3%

t = 2years

I = (10000×3×2)/100

= $600

Total amount = $10 600

Compound Interest:

$A = p( {1 + \frac{r}{100}) }^{n}$

p = $100000

r = 3/730 (daily)

t = 730 (2yrs)

A = 100000[1+(3/73000)]^730

= $103 045.39 (2d.p)

Difference = $103045.39 -

$10600

= $92 445.39

(Correct me if i am wrong)

You are given a choice of taking the simple interest on ​$10,000 invested for 2 years at a rate of 3​% or the interest on ​$100,

You are given a choice of taking the simple interest on $10,000 invested for 2 years at a rate of 3% or the interest on $100,