Respuesta :
Compound interest is the interest that is compounded daily, weekly, monthly, annually e.t.c on a loan, investment, or an amount of money kept in a financial institution.
Amber has a total of $2,225.35 after 10 years. Jin has a total of $ 2,225.54 after 10 years. So earns Jin $0.19 more interest.
- For Amber:
The formula to find the amount compounded daily after 10 years is:
A = P(1 + r/n)nt
Where
P = Principal ( Initial amount) = $1000
R = Interest rate = 8%
n = Number of times interest is compounded = Daily = 365 days
t = Time in years = 10 years
First, convert R as a percent to r as a decimal
r = R/100
r = 8/100
r = 0.08 rate per year,
Then solve the equation for A
A = P(1 + r/n)^nt
A = 1,000.00(1 + 0.08/365)^(365x10)
A = 1,000.00(1 + 0.000219178)^(3650)
A = $2,225.35
The interest for Amber is:
P (principal) = $1,000.00
A( Amount) = $2,225.35
I (interest) = P - A
= $2,225.35 - $1,000.00
= $1,225.35
- For Jin
The formula to find the amount compounded continuously after 10 years is:
A = Pe^rt
Where
P = Principal ( Initial amount) = $1000
R = Interest rate = 8%
n = Number of times interest is compounded = Continuously
t = Time in years = 10 years
First, convert R as a percent to r as a decimal
r = R/100
r = 8/100
r = 0.08 rate per year,
Then solve the equation for A
A = Pe^rt
A = 1,000.00(2.71828)^(0.08)(10)
A = $2,225.54
The interest for Jin is:
P (principal) = $1,000.00
A( Amount) = $2,225.54
I (interest) = P - A
= $2,225.54 - $1,000.00
= $1,225.54
Comparing the interest for both Amber and Jin, we find the difference to know who earns more.
Jin's interest - Amber's interest
= $1,225.54 - $1,225.35
= $0.19
Jin earns more interest.
Therefore, Amber has a total of $2,225.35 after 10 years. Jin has a total of $ 2,225.54 after 10 years. So earns Jin $0.19 more interest.
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https://brainly.com/question/2932702
