SOLUTION: which of the following will earn more money in 3 years a. $3000 at 5.5% simple interest b. $3000 at 5.6% compound interest

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Question 735325: which of the following will earn more money in 3 years
a. $3000 at 5.5% simple interest
b. $3000 at 5.6% compound interest
Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
which of the following will earn more money in 3 years
a. $3000 at 5.5% simple interest
A(t) = P(1+rt)
A(3) = 3000(1+0.055*3) = 3000*(1.165) = $3495
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b. $3000 at 5.6% compound interest
A(t) = P(1+(r/n))^(nt)
A(t) = 3000(1+(0.056/1)^(1*3)
A(t) = 3000(1.056)^3 = $3532.75
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Cheers,
Stan H.
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