Question

You have an investment of $145 000.00 you want to invest for 199days at a rate of 6.2%.The investment house gives you 2 options. they inform you tha you should choose between simple interest and compound interest. calculate the difference between the options. show the formula

Answer 1

Okay, so do you know what simple and compound interest are?

Answer 2

Simple interest formula= INTEREST=PRINCIPLE*RATE*TIME OR
I=PRT .

Answer 3

Compound Interest Formula:


P is the principal (the initial amount you borrow or deposit)

r is the annual rate of interest (percentage)

n is the number of years the amount is deposited or borrowed for.

A is the amount of money accumulated after n years, including interest.

When the interest is compounded once a year:

A = P(1 + r)n

Answer 4

so what is the answer my dear

Answer 5

You plug in your givens into the equations that mimig97 explained. It's as simple as that.

Answer 6

Yup just plug in your numbers into the equations.
;)

Answer 7

However I believe it's A=P(1+r) ^n. Remember that n is for the number in years. When it's asking for 199 days you'll need to convert that into years. It should be a fraction

Answer 8

oh, yes, that's the right equations... sorry!

Answer 9

Lol no problem :3

Answer 10

The is a compound interest, the full future value of the investment
present value of the investment
the interest rate
time of the investment in years, can you help

Answer 11

But you need to know how often it is being compunded within the 199 days span. Is it after every 3 months, 3 days etc. It needs to be specified