Respuesta :
Answer:
$50
$30.45
Simple interest.
Step-by-step explanation:
If I invested $500 at 5% simple interest for 2 years, then the amount of interest that I will get will be calculated by the simple interest formula as
[tex]I = \frac{Prt}{100} = \frac{500 \times 5 \times 2}{100} = 50[/tex] dollars.
Now, if I invest $500 at 3% compounded monthly for 2 years, then the amount of compound interest will be calculated by the compound interest formula as
[tex]I = P(1 + \frac{r}{100})^{t} - P = 500(1 + \frac{3}{100})^{2} - 500 = 30.45[/tex] dollars.
So, I will prefer to invest in simple interest as the interest there is more. (Answer)
