Question

Jenny is saving for a vacation to the beach how much more interest will she earn if she invest 300% Four Points 25% compound interest compounded annual for 10 years then if she invest $500 at 4.35% simple interest for 10 years

Answer 1

simple interest is

`I=Prt=500\cdot0.0435\cdot10=217.5`

compound interest

`A=P(1+r)^t=300(1+0.25)^(10)=300(1.25)^(10)=300\cdot9.31=2793`

interest is:

`I=2793-300=2493`

answer; she earns more with annual compound interest