Question

With $3500 each, Martin and Edward opened separate accounts. Each account offered 4.5% interest over 10 years. At the end of 10 years, Edward earned more than Martin. Why? A. Edward invested for a different amount of time than Martin. B. Edward had a different interest rate than Martin. C. Edward earned compound interest, and Martin earned simple interest. D. Edward e

Soomeone helpppp meeee

Answer 1

Given that Edward and Martin invested the same amount of $3500, with interest rate of 4.5% and time period of 10 years: The difference in the amount of money will be brought about by different schemes in which they both invested the money.
The interest earned from above cash under simple interest will be:
S.I=(PRT)/100
S.I=3500*4.5/100*10=$1575
the total amount after 10 years will therefore be:
1575+3500
=$5075

The same amount if it was compounded annually, the amount after 10 years will be:
FV=P(1+r/100)^n
FV=3500(1+3.5/100)^10
FV=4,937.10
we therefore conclude that the answer is:
Edward must have earned simple interest while Martin earned compound interest.