Answer:
A) $1,717.73.
B) $1,807.02.
Step-by-step explanation:
Given that $ 1234 is invested at 5.6% annual interest for 7 years, to determine the final amount applying a simple interest and a compound interest, the following calculations must be performed:
A)
1234 + ((1234 x 0.056) x 7) = X
1234 + (69.104 x 7) = X
1234 + 483.728 = X
1717.728 = X
Therefore, applying a simple interest of 5.6% per year, in 7 years the amount invested would be $ 1,717.73.
B)
1234 x (1 + 0.056) ^ 7 = X
1234 x 1.056 ^ 7 = X
1234 x 1.464 = X
1,807.02 = X
Therefore, applying compound interest, the sum would become $ 1,807.02.
