2 answers:
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Answer:
$50
$30.88
I will invest in simple interest as the interest there is more.
Step-by-step explanation:
If I invested $500 at 5% simple interest for 2 years, then the interest that I will get will be given by the formula
, where P is the invested principal, r is the APR and t is the time in years.
So, in our case, dollars. (Answer)
Now, if I invest $500 at 3% compound interest compounded monthly for 2 years.
Now, using the formula of compound interest we have
, where r is the APR and n is the number of times in a year the principal is compounded.
In our case, dollars. (Answer)
Therefore, I will invest in simple interest as the interest there is more. (Answer)