Question

Cecilia has $780 in an account earning 5.2% simple interest. How much more interest would her account earn in 6 years with annually-compounded interest?

Answer 1

$1057.3

Explanation:

First we'll find the Interest no. 1, which is simple interest, assuming the time 1 year:

S.I= PRT/100

S.I= 780*5.2*1/100

S.I=$40.56

Now we'll find interest no.2, which is compound interest, time is 6 years, Principal amount (780) will remain the same as well as the rate thus (putting in the formula of compound interest- annual-
`A=P(1+(R)/(100) )^t`):

`A= 780(1+(5.2)/(100))^6`

A= $1057.3