Answer: $773.58
Step-by-step explanation:
From the question, we are told that Travis invested $9,250 in an account that pays 6 percent simple interest over a 7 year period.
We need to calculate the simple interest first. This will be:
= PRT/100
where
P = principal = $9250
R = rate = 6%
T = time = 7 years
Simple interest = (9250 × 6 × 7)/100
= $388500/100
= $3885
Amount after 7 years will now be:
= $9250 + $3885
= $13135
If the interest was compounded annually, this will be:
FV = PV(1 + r)^n
= $9,250(1 + 0.06)^7
= $13,908.58
Therefore, the difference will be:
= $13,908.58 - $13,135
= $773.58