Respuesta :
Answer:
$8,1 more
Explanation:
With a simple interest method Beatrice will receive the same amount in interests each year. It is calculated with this formula:
Interest(I)= Initial capital (IC)* interest rate (i)
Interests:
Year 1: $1,470*0,03= $44,1
Year 2: $1,470*0,03= $44,1
Year 3: $1,470*0,03= $44,1
Year 4: $1,470*0,03= $44,1
Total interests earned: $176,4
With a compound interest method Beatrice receive more interests. We use this formula:
Interest (I)= Previous period capital* Interest rate (i)
Year 1: $1,470*0,03= $44,1 New capital: $1,470+$44,1= $1,514.1
Year 2: $1,514.1*0,03= $45,4 New capital: $1,514.1+$45,4 =$1,559.5
Year 3: $1,559.5*0,03= $46,8 New capital: $1,559.5+$46,8 =$1,606.3
Year 4: $1,606.3*0,03= $48,2 New capital: $1,606.3+$48,2 =$1,654.5
Total interests earned: $184.5
She could save $8.1 more with the compounded method.
