The House A is more worth than House B .
What is compound interest?
Compound interest is an interest accumulated on the principal and interest together over a given time period. The interest accumulated on a principal over a period of time is also accounted under the principal.
Formula of Compound interest :
[tex]A = P (1+\frac{r}{100} )^{n}[/tex]
Where,
A = Final amount
P = initial principal
r = rate per annum
n = Time in years
According to the question
House A:
Principal = 125260
Rate = 5%
Time in years = 2
Applying Formula of Compound interest for final amount
[tex]A = P (1+\frac{r}{100} )^{n}[/tex]
[tex]A = 125260 (1+\frac{5}{100} )^{2}[/tex]
[tex]A = 125260 (1.05)^{2}[/tex]
A = 138,099.15
House B:
Principal = 120160
Rate = 6%
Time in years = 2
Applying Formula of Compound interest for final amount
[tex]A = P (1+\frac{r}{100} )^{n}[/tex]
[tex]A = 120160 (1+\frac{6}{100} )^{2}[/tex]
[tex]A = 120160(1.06)^{2}[/tex]
A = 135,011.776
Hence , House A is more worth than House B .
To know more about Compound interest here:
https://brainly.com/question/14295570
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