Answer :
Answer:
The interest earn at simple interest is $26.25
The interest earn at compound interest is $26.88
Step-by-step explanation:
Given as :
The principal money = p = $350
The interest rate = r = 2.5 %
The time period = t = 3 years
Let the interest = S.I
From Simple Interest method
Simple Interest = [tex]\dfrac{\textrm principal\times \textrm rate\times \textrm time}{100}[/tex]
Or, S.I = [tex]\dfrac{\textrm p\times \textrm r\times \textrm t}{100}[/tex]
Or, S.I = [tex]\dfrac{\textrm $350\times \textrm 2.5\times \textrm 3}{100}[/tex]
Or, S.I = [tex]\frac{2625}{100}[/tex] = $ 26.25
Hence The interest earn is $26.25
From Compound Interest method
Amount = Principal × [tex](1+\dfrac{\textrm rate}{100})^{\textrm time}[/tex]
Or, Amount = $350 × [tex](1+\dfrac{\textrm 2.5}{100})^{\textrm 3}[/tex]
Or, Amount = $350 × (1.025)³
Or, Amount = $350 × 1.0768
∴ Amount = $376.88
Now, Interest = Amount - principal
So, Interest = $376.88 - $350
Or, Interest = $26.88
Hence The interest earn is $26.88
Answer