Question

With a principal investment of $19,200, which account will have the greatest value after 5 years?

simple interest: I = P • r • t
interest compounded annually is A = P (1 + r)t
interest compounded quarterly: A = P (1 + r/4 )4t


A.
3.6% with interest compounded annually

B.
3.8% in a simple interest account

C.
3.4% with interest compounded annually

D.
3.2% with interest compounded quarterly

Answer 1

What do you think?

Answer 2

Describe to me what the difference is between simple and compound interest?

Answer 3

Take the first option and use it to crank out the interest with the given data of

P = 19 200 and t = 5 years

Option A Test: A. 3.6% with interest compounded annually

interest compounded annually is A = P (1 + r)^t

A = 19 200 ( 1 + .036)^5

A = $ 4535 interest

Total amount after 5 years is 19 200 + 4 535 = ?

After doing that, move on to check the total amounts for other 3 options.

@OpenStudier0