First, let's calculate the interest earned from 3 years of simple interest:

Simple interest is calculated as (Principal amount * Rate of Interest * Time)/100.

So, for a $100 investment at 10% for 3 years, the simple interest would be:

(100 * 10 * 3)/100 = $30

Next, let's calculate the interest earned from 3 years of annual compounding:

Compound interest is calculated using the formula: P(1 + r/n)^(nt) - P, where P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the time the money is invested for.

For a $100 investment at 10% compounded annually for 3 years, the compound interest would be:

100(1 + 10/100)^(1*3) - 100 = $33.10

So, the difference between the compound interest and the simple interest is:

$33.10 - $30 = $3.10

Therefore, you will earn $3.10 more from 3 years of annual compounding of 10% compared to 3 years of simple interest on an initial 100-dollar investment.

Question

First, let's calculate the interest earned from 3 years of simple interest:

Simple interest is calculated as (Principal amount * Rate of Interest * Time)/100.

So, for a $100 investment at 10% for 3 years, the simple interest would be:

(100 * 10 * 3)/100 = $30

Next, let's calculate the interest earned from 3 years of annual compounding:

Compound interest is calculated using the formula: P(1 + r/n)^(nt) - P, where P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the time the money is invested for.

For a $100 investment at 10% compounded annually for 3 years, the compound interest would be:

100(1 + 10/100)^(1*3) - 100 = $33.10

So, the difference between the compound interest and the simple interest is:

$33.10 - $30 = $3.10

Therefore, you will earn $3.10 more from 3 years of annual compounding of 10% compared to 3 years of simple interest on an initial 100-dollar investment.

Knowee AI · Accepted Answer

First, let's calculate the interest earned from 3 years of simple interest:

Simple interest is calculated as (Principal amount * Rate of Interest * Time)/100.

So, for a $100 investment at 10% for 3 years, the simple interest would be:

(100 * 10 * 3)/100 = $30

Next, let's calculate the interest earned from 3 years of annual compounding:

Compound interest is calculated using the formula: P(1 + r/n)^(nt) - P, where P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the time the money is invested for.

For a $100 investment at 10% compounded annually for 3 years, the compound interest would be:

100(1 + 10/100)^(1*3) - 100 = $33.10

So, the difference between the compound interest and the simple interest is:

$33.10 - $30 = $3.10

Therefore, you will earn $3.10 more from 3 years of annual compounding of 10% compared to 3 years of simple interest on an initial 100-dollar investment.

Simple and compound interestIt is critical to be able to differentiate between simple interest and compound interest.How much more interest will you earn from 3 years of annual compounding of 10% compared to 3 years of simple interest on an initial 100-dollar investment?$3.00$4.49$3.10$4.82

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