Question

$175 at 5.45% for 36 months

What is the difference between the interest amount in the account if you did simple and compound interest?

Answer 1

Results are below.

Explanation:

Giving the following information:

$175 at 5.45% for 36 months

First, we need to determine the monthly interest:

Monthly interest= 0.0545/12= 0.004542

Now, we will calculate the interest earned using both simple and compound interest:

Simple interest:

I= P*r*t

I= 175*0.004542*36

I= $28.61

Compound interest:

I= PV*(1+i)^n - PV

I= 175*(1.004542^36) - 175

I= $31.01