Step-by-step explanation:
Simple interest formula
[tex]A = P (1 + rt)[/tex]
Compound interest formula
[tex]A = P(1 + \frac{r}{n})^{nt}[/tex]
a.
[tex]A = 5000 (1 + 0.025*1)\\A=5000(1.025)\\A=5125[/tex]
Simple interest is $125
b
. [tex]A = 5000 (1 + \frac{0.025}{1})^{1*1} \\A=5000(1.025)\\A= 5125[/tex]
Compound interest is $125
c. the result for both a and b are the same
d.
[tex]A = 5000 (1 + 0.025*3) \\A=5000(1.075) \\A=5375[/tex]
the simple interest is $375
e
. [tex]A = 5000 (1 + \frac{0.025}{1})^{1*3}] \\A=5000(1.025)^3 \\A=5000(1.077)\\A= 5385[/tex]
the compound interest is $385
f. the result compared, compound interest is $10 more than simple interest
g.
[tex]A = 5000 (1 + 0.02*6) \\A=5000(1.12) \\A=5600[/tex]
the simple interest is $600
h.
[tex]A = 5000 (1 + \frac{0.02}{1})^{1*6}] \\A=5000(1.12)^6 \\A=5000(1.9738) \\A= 9869[/tex]
the compound interest is $4869
i. the result from g and h, h is over 8 times bigger than g.
j. interest compound annually is not the same as simple interest, only for the case of a and b seeing that it is for 1 year. but for 2years and above there is difference as seen in c to h
