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Furkat [3]
3 years ago
11

Bethany needs to borrow $10,000. She can borrow the money at 6% simple interest for 5 yr or she can borrow at 5% with interest c

ompounded continuously for 5 yr.
a. How much total interest would Bethany pay at 6% simple interest?
b. How much total interest would Bethany pay at 5% interest compounded continuously?
c. Which option results in less total interest?
Business
1 answer:
marishachu [46]3 years ago
3 0

Answer:

a. $3000

b. 2840.25

c. compounded continuously

Explanation:

a. principal amount,  p = $10000

Interest rate in the case of simple interest = 6%

Time, t = 5 years

Interest amount = Prt

Interest amount = 10000 x 6% x 5 = $3000

b. principal amount,  p = $10000

Interest rate, r = 5%

Time, t = 5 years

Interest amount = Pe^(rt) - P

Interest amount = 10000 (2.71)^(5% x 5) - 10000

Interest amount = 2840.25

c. Compounded continuously has a lower interest amount.

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Explanation:

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Answer:

$1.5 million

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The computation of break even sales in dollars is shown below:

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where,  

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And, Profit volume ratio = (Contribution) ÷ (sales) × 100

So, the Profit volume ratio = ($1,450,000) ÷ ( $2,500,000) × 100 = 58%

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