Question

Amanda has $6000 to invest. She has a choice of 6% p.a. compound interest, payable half-yearly or 7% p.a. simple interest. Which should she choose if she plans to invest the money for
a.) 5 years b.) 7 years

Answer 1

Answer:

5 years

Step-by-step explanation:

principal (p) = 600

rate of interest (r) = 7%

time (t) = 5 years

s.i = p x r x t /100

   = 180      

amount = 780  

compound interest

p =  600

r = 6%

t (n) = 5 years

when compounded half yearly

p = 600

r = 3%

t (n) = 10 half year  

amount =  (1 + frac{6}{200}^{10})  

             = 806.349827606

Answer 2

Answer:

$\: \:$

Step-by-step explanation:

Answer:

compound interest

Step-by-step explanation:

principal (p) = 600

rate of interest (r) = 7%

time (t) = 5 years

s.i = p x r x t /100

   = 180      

amount = 780  

compound interest

p =  600

r = 6%

t (n) = 5 years

when compounded half yearly

p = 600

r = 3%

t (n) = 10 half year  

amount =  (1 + frac{6}{200}^{10})  

             = 806.349827606