Question

FINANCE

Luke could invest $1000 at simple interest rate of 11% p.a. for 4 years or at 10% p.a. compound interest for the same period of time. Which is the better investment and by how much?

Pls show full working out ty ;)

Answer 1

Explanation:

Simple interest rate = 1000(1+11x4) = 4500

= 4500-1000=3500

Comppound interest rate = 100%+10%=110%/100%=1.1%

1000X(1.1)^4=1464.10