Question

2,500 dollars of 4.5% of 2 years

Answer 1

Compound Interest = $2730.06 - $2500 = $230.062 And Simple interest = $225

Explanation:

Given as :

The principal = $2500

Rate = 4.5$

Time period = 2 years

From compound Interest method

Amount = Principal
`(1 +(Rate)/(100))^(Time)`

Amount = $2500
`(1 +(4.5)/(100))^(2)`

Amount = $2500(1.045)² = $2730.06

And compound Interest = A - P

Or, Compound Interest = $2730.06 - $2500 = $230.062

Again from Simple Interest method :

SI =
`(Principal* Rate* Time)/(100)`

or, SI =
`(2500* 4.5* 2)/(100)`

Or, SI = $225

Hence from given principal ,interest rate and Time period

Compound Interest = $2730.06 - $2500 = $230.062 And Simple interest = $225 Answer