Question

I need help finding the answers between a, b, c and filing in the graph

Answer 1

Given

P = $6000

R = 6%

Find

Simple interest and compound interest for 5 , 10 and 15 years

Step-by-step explanation

As we know the formula of simple interest and compound interest

`\begin{gathered} S.I=(P* R* T)/(100) \\ C.I=A-P,where \\ A=P(1+(r)/(100))^t \end{gathered}`

First we will find the simple interest for all three years.

`\begin{gathered} S.I=(6000*6*5)/(100)=1800 \\ S.I=(6000*6*10)/(100)=3600 \\ S.I=(6000*6*15)/(100)=5400 \end{gathered}`

Compound interest for 5 years

`\begin{gathered} C.I=P(1+(r)/(100))^t-P \\ C.I=6000(1+(6)/(100))^5-6000 \\ C.I=2029.35 \end{gathered}`

Compound interest for 30 years

`\begin{gathered} C.I=P(1+(r)/(100))^t-P \\ C.I=6000(1+(6)/(100))^(30)-6000 \\ C.I=28460.947 \end{gathered}`

Compound interest for 15 years

`\begin{gathered} C.I=P(1+(r)/(100))^t-P \\ C.I=6000(1+(6)/(100))^(15)-6000 \\ C.I=8379.34 \end{gathered}`

Final Answer

(a) Simple interest consistently earned more.

(b) Difference

in 5 years = 229.35

in 15 years = 2979.34

in 30 years = 17660.94

(c) As the time increases difference between simple and compound interest also increases.