Question

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What will be the simple interest earned when you invest $1,000 for 3 years at 10 percent and the compound interest earned whe
same sum for 2 years at 5 percent ?
The simple interest earned when you invest $1,000 for 3 years at 10 % is $
The interest compounded when you inve
for 2 years at 5 % is $

Answer 1

The simple interest earned when you invest $1,000 for 3 years at 10 % is $ 300 . The interest compounded when you invest the same sum for 2 years at 5 % is $ 331 .

Step-by-step explanation:

#Platofam

Answer 2

Answer: The simple interest earned when you invest $1,000 for 3 years at 10 % is $300.

The interest compounded when you invest for 2 years at 5 % is $102.5.

Step-by-step explanation:

(i) Formula for simple interest :
`I=Prt`, where P= Principal amount , r= rate of interest (in decimal) and t = time.

(ii) Formula for compound interest :
`CI=P[(1+r)^t-1]`, where P= Principal amount , r= rate of interest (in decimal) and t = time.

Given , P= $1,000 for t=3 years at r= 10 percent = 0.10 ( in decimal)

Then , Simple interest will be :

`I=1000*0.10*3=\$300` [By using (i)]

Thus, The simple interest earned when you invest $1,000 for 3 years at 10 % is $300.

Also, Given , P= $1,000 for t=2 years at r= 5 percent = 0.05 ( in decimal)

Compound interest will be :

`CI.=1000[(1+0.05)^2-1]=1000[(1.05)^2-1]\\\\=1000[1.1025-1]\\\\=1000[0.1025]=102.5` [By using (ii)]

Hence, interest compounded when you invest for 2 years at 5 % is $102.5.