Respuesta :
Answer:
$50
$30.88
I will invest in simple interest as the interest there is more.
Step-by-step explanation:
If I invested $500 at 5% simple interest for 2 years, then the interest that I will get will be given by the formula
[tex]I = P \times \frac{rt}{100}[/tex], where P is the invested principal, r is the APR and t is the time in years.
So, in our case, [tex]I = 500 \times \frac{5 \times 2}{100} = 50[/tex] dollars. (Answer)
Now, if I invest $500 at 3% compound interest compounded monthly for 2 years.
Now, using the formula of compound interest we have
[tex]I = P(1 + \frac{r}{n \times 100} )^{tn} - P[/tex], where r is the APR and n is the number of times in a year the principal is compounded.
In our case, [tex]I = 500(1 + \frac{3}{12 \times 100} )^{2 \times 12} - 500 = 30.88[/tex] dollars. (Answer)
Therefore, I will invest in simple interest as the interest there is more. (Answer)
