Question

Robin invested $1000 in a 12% simple interest savings deposit for 3

years. He also invested an equal amount in a 10% compound interest
savings deposit for 3 years. At the end of 3 years, how much more
interest did he get from the simple interest deposit?

Answer 1

Explanation:

Lets find out,shall we?

Simple interest=(PRT)/100

=$1000×12×3)/100

=$360

Now for compound interest

A=P(1+R/100)^t

A=$1000(1+12/100)^3

A=$1404.928

so interest for compound interest=$(1404.928-1000)=$404.928

Clearly,Robin got more interest by compound interest than simple interest which business people understand lol.

Difference in interest=$404.928-360=$44.928