Answer: Simple interest amount larger by $9.00
Step-by-step explanation:
Simple interest of 4.1% on $2,750 for 4 years:
Formula for simple interest is:
= Amount * (1 + rate * no. of periods)
= 2,750 * ( 1 + 4.1% * 4)
= 2,750 * 1.164
= $3,201
Compound interest of 3.8% on $2,750 for 4 years:
= Amount * (1 + rate) ^ no. of periods
= 2,750 * ( 1 + 3.8%)⁴
= $3,192
Difference:
= 3,201 - 3,192
= $9.00
