To find the higher resulting balance, we need to calculate the future value of the investment using both simple interest at 8% and compounded interest at 9%.
For simple interest, the formula to calculate the future value is:
FV = P(1 + rt)
where FV is the future value, P is the principal amount, r is the interest rate, and t is the time period.
Plugging in the values:
FV = 500(1 + 0.08 * 10)
FV = 500(1 + 0.80)
FV = 500(1.80)
FV = $900
For compounded interest, the formula to calculate the future value is:
FV = P(1 + r/n)^(nt)
where FV is the future value, P is the principal amount, r is the interest rate, n is the number of times interest is compounded per year, and t is the time period.
Plugging in the values:
FV = 500(1 + 0.09/1)^(1 * 10)
FV = 500(1 + 0.09)^(10)
FV = 500(1.09)^(10)
FV = $1227.54
Therefore, the higher resulting balance after investing $500 for a period of 10 years is $1227.54.
between simple interest at 8% and compounded interest at 9% find the higher resulting balance after investing $500 for a period of 10 years. Round the answer to two decimal places?
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