Anastasia was trying to decide which investment plan would be best over 10 years. Bank A was offering 8.5% simple interest on her money using the formula I=Prt Bank B was offering 8% compounded annually using the formula A=P (1+r) ^t. Which bank is a better investment if she has $2,000 to invest for 10 years?

A. Bank A is the better investment. In 10 years, her $2,000 will grow to $4,317.85, and with bank B, her $2,000 will grow to $3,700.

B. Bank B is the better investment. In 10 years, her $2,000 will grow to $4,317.85, and with bank A, her $2,000 will grow to $3,600.

C. Bank A is the better investment. In 10 years, her $2,000 will grow to $4,521.97, and with bank A, her $2,000 will grow to $3,700.

D. Bank B is the better investment. In 10 years, her $2,000 will grow to $4,317.85, and with bank A, her $2,000 will grow to $3,700.

Question

Lexie Stanton

Mathematics

8 September, 04:46

Anastasia was trying to decide which investment plan would be best over 10 years. Bank A was offering 8.5% simple interest on her money using the formula I=Prt Bank B was offering 8% compounded annually using the formula A=P (1+r) ^t. Which bank is a better investment if she has $2,000 to invest for 10 years?

A. Bank A is the better investment. In 10 years, her $2,000 will grow to $4,317.85, and with bank B, her $2,000 will grow to $3,700.

B. Bank B is the better investment. In 10 years, her $2,000 will grow to $4,317.85, and with bank A, her $2,000 will grow to $3,600.

C. Bank A is the better investment. In 10 years, her $2,000 will grow to $4,521.97, and with bank A, her $2,000 will grow to $3,700.

D. Bank B is the better investment. In 10 years, her $2,000 will grow to $4,317.85, and with bank A, her $2,000 will grow to $3,700.

+2

Answers (2)

Know the Answer?

Lorena Simon · Answer 1

A

2,000 * (1+0.085*10)

=3,700

B

2,000 * (1+0.08) ^ (10)

=4,317.85

Bank B is the better investment. In 10 years, her $2,000 will grow to $4,317.85, and with bank A, her $2,000 will grow to $3,700

Allyson Sampson · Answer 2

Allyson Sampson 8 September, 04:54

0

B sounds about right. I'm not sure.