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Norah has $50,000 to invest. She is considering two investment options. Option A pays 1.5% simple interest. Option B pays 1.4% interest compounded annually.

User Brian Hawk
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1 Answer

3 votes

Answer with Step-by-step explanation:

We are given that

P=$50,000

For A, r=1.5%

For B,r=1.4%

We know that


A=P(1+(r)/(100))^n

Where n=Time(in years)

r=Rate of interest annually

P=Principle value

For A

n=5 years


A=50000(1+(1.5)/(100))^5=$53864

n=10 Years


A=50000(1+(1.5)/(100))^(10)=$58027

n=20 years


A=50000(1+(1.5)/(100))^(20)=$67343

For B

n=5 year


A=50000(1+(1.4)/(100))^5=$53599

n=10 years


A=50000(1+(1.4)/(100))^(10)=$57458

n=20 years


A=50000(1+(1.4)/(100))^(20)=$66028

User Mikko Viitala
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