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Tamika has $2,000 she wants to save. She has two options:
• She could save at a bank for 3 years with a fixed simple interest rate of 9%.
• She could save at a credit union for 3 years with an 8.8% fixed interest rate compounded annually.
Which answer correctly compares the total return Tamika would receive with the simple interest from the bank and the compounded interest from the credit union?

Respuesta :

The total return would earn if she deposits at the banks where she would earn a simple interest is  $2540 . While the total return she would earn from the bank where she earns a compound interest is $2,575.83.

The total return of Tamika if she deposits at the bank where she would earn a simple interest can be determined using this formula:

Amount = P + [P x r x n]

Where:

P = amount deposited

r = interest rate

n = number of years

2000 + [2000 x 0.09 x 3] =

2000 + 540

= $2540

The total return of Tamika if she deposits at the bank where she would earn a compound interest can be determined using this formula:

Amount = P (1 + r)^n

$2000 x (1.088)^3 = $2,575.83

A similar question was answered here: https://brainly.com/question/23734449?referrer=searchResults

kumikumika

Answer:

After 3 years, Tamika would receive $540 in simple interest from the bank or $575.83 in compound interest from the credit union!!!!!!