You have $25,000 to invest. You can find an account (Acount A) that guarantees $925 per year. You also found a simple interest account (Account B) that pays 6.5 percent annually. Which account will earn more in interest in 5 years? How much more did the account earn?

Question

Shannon Hammond

Mathematics

14 November, 00:42

You have $25,000 to invest. You can find an account (Acount A) that guarantees $925 per year. You also found a simple interest account (Account B) that pays 6.5 percent annually. Which account will earn more in interest in 5 years? How much more did the account earn?

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Answers (1)

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Lennon Oliver · Answer 1

Account A

A=p+i

A=25,000 + (925*5)

A=29,625

Account B

A=p (1+rt)

A=25,000 * (1+0.065*5)

A=33,125

How much more did the account B earn

33,125-29,625

=3,500