Question

A) Abdul invests 400$ at 6.05% per year simple interest, calculate how much interest Abdul receives

B) Samia receives 400$ for 2 years at 6% per year compound interest, give your answer in 2 decimal places

Answer 1

$24.20

amount invested = $356

Interest = $44

Explanation:

Samia receives a total amount of 400$ for 2 years at 6% per year compound interest, give your answer in 2 decimal places

Simples interest = amount invested x time x interest rate

400 x 0.065 x 1 = $24.20

b. interest = amount received - amount invested

Amount invested = amount received / (1 + r)^n

r = interest rate

n = number of years

400 / (1.06)^2 = 356

Interest = 400 - 356 = $44