Question

Tyson and Ariana each invested $2,500 in separate accounts. Tyson’s interest rate is 5.75% and is compounded annually. Ariana’s simple interest rate is 5.75%. Neither will make any additional deposits or withdrawals. At the end of 6 years, how much more has Tyson earned? Round your answer to the nearest cent.

I don't know what to do here, please help. Please show me how to work it out.

Thanks!

Answer 1

I forgot the formula for compound interest and simple interest, can someone tell me what is is please.

Answer 2

Simple interest is calculated only on the amount of deposit, while compounding interest is calculated on principal, plus interest.

This is the difference between the 2 interest rate but they both have the same percentage.

Answer 3

Tyson
2500 * 1.0575^6 = 2500 * 1.39856 = 3496.41

Ariana
2500 * .0575 = 143.75 interest per year
143.75 * 6 = 862.50 interest total
+ 2500 = 3362.50

so 3496.41 - 3362.50

Answer 4

Thanks a bunch, please and Damon! You guys helped a lot.

Answer 5

pipi nut lol

Answer 6

pipi nut lol