Question

$3000 is invested at 3% annual interest for 3 years. a. Simple Interest b. Compound Interest

Answer 1

Answer:

a. $270

b. $3,278.18

Step-by-step explanation:

Given that

The principal amount is $3,000

Annual rate of interest is 3%

And, the time period is  3 years

We need to find out the simple interest & compound interest

The following formulas should be used

a. For simple interest

= Principal × rate of interest × time period

= $3,000 × 3% × 3 years

= $270

b. For compound interest

= Principal × (1 + rate of interest)^time period

= $3,000 × (1 + 0.03)3

= $3,000 × 1.03^3

= $3,278.18