Mandy borrows $10,000 for 3 years at a 6% interest. What is the cost of the loan, or total interest?
2 answers:
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Answer:
6 Years
Step-by-step explanation:
Orlando invests $1000 at 6% annual interest compounded daily.
Orlando's investment =
Bernadette invests $1000 at 7% simple interest.
Bernadette's investment = A = 1000(1+0.07×t)
By trail and error method we will use t = 5
Bernadette's investment will be after 5 years
1000(1 + 0.07 × 5)
= 1000(1 + 0.35)
= 1000 × 1.35
= $1350
Orlando's investment after 5 years
=
=
= 1000(1.349826)
= 1349.825527 ≈ $1349.83
After 5 years Orlando's investment will not be more than Bernadette's.
Therefore, when we use t = 6
After 6 years Orlando's investment will be = $1433.29
and Bernadette's investment will be = $1420
So, after 6 whole years Orlando's investment will be worth more than Bernadette's investment.