Between simple interest at eight percent and compound interest at nine percent find the higher resulting balance after investing five hundred dollars for a. Of ten years round the answer to 2 decimal places

Answer 1

To find the higher resulting balance, we need to calculate the balance after 10 years for both simple interest at 8% and compound interest at 9%.

For simple interest, we use the formula: Balance = Principal + (Principal * Rate * Time)
where Principal = $500, Rate = 8%, and Time = 10 years.

Balance for simple interest = $500 + ($500 * 0.08 * 10) = $900

For compound interest, we use the formula: Balance = Principal * (1 + Rate/100)^Time
where Principal = $500, Rate = 9%, and Time = 10 years.

Balance for compound interest = $500 * (1 + 0.09/100)^10 = $1038.62 (rounded to 2 decimal places)

Therefore, the higher resulting balance after 10 years of investing $500 is $1038.62 (with compound interest at 9%).