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!
6 answers
I forgot the formula for compound interest and simple interest, can someone tell me what is is please.
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.
This is the difference between the 2 interest rate but they both have the same percentage.
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
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
Thanks a bunch, please and Damon! You guys helped a lot.
pipi nut lol
pipi nut lol
1 answer