Question

A youth group earns $600 for charity and decides to put it in a bank. Calculate the amount of money the group will have for each scenario.

Part A chase bank pays simple interest at 5% and the group leaves the money for 5 years
part B witney bank pays an interest rate of 4% compounded annually and the group leaves the money for 6 years

Answer 1

Based on the types of compounding and the interest rates, the following are true:

• Part A - The group will have $750
• Part B - The group will have $759.19

When using simple interest, the amount the group will have is:

= Amount x ( 1 + rate x number of years )

= 600 x ( 1 + 5% x 5)

= $750

When using compound interest, the group will have:

= Amount x ( 1 + rate) ^ Number of years

= 600 x ( 1 + 4%)⁶

= $759.19

In conclusion, compound interest yields more.

Find out more about compound interest at https://brainly.com/question/25263325.