Question

Compare the interest earned by $10,000 for four years at 9% simple interest with interest earned by the same amount for four years at 9% compounded annually Why does a difference occur Click the icon to view the interest and annuity table for discrete compounding when 9% per year. The simple interest earned is $ (Round to the nearest dollar.) The compound interest earned is $ (Round to the nearest dollar) There is a difference in the amount of interest earned because Vallows interest from previous years to earn additional interest, whereas only considers the original principal

PLEASE SOLVE ITT

Answer 1

(1) P= $10,000 ; R=94, TE 444f s.I= PXRXT 10,000 X 9 X 4 >> SI = 3600 = 5.1 = $3600 100/ >> A = 10000 P= $10,000 , R = 94. Tz 444 A = Plite) 3) A = 10000 ( 14 years ) Az 14115.81 2A = $14115-81 C'I = AP =414115-81 -£10000 (CI = $410581] SOLUTION # The Simple Earned is $ 3600 # The compound inferent earned is $ 4115.81 # There ia difference in the amount of infeest Earned because compound intenst allow interent from previous years to Earn additional intent, whereas simple interent only consider the original principle