Question

You invest $500 at 10 percent interest. at the end of 2 years with simple interest you will have ____ and with compound interest you will have ____.

Answer 1

The amount I would have with simple interest is $600 and $605 with compound interest.

What are the future value of the investments?

The future value of the investment with simple interest is the sum of interest earned and the amount invested.

Simple interest = amount invested x interest rate x number of years

$500 x 2 x 0.1 = 100

Future value : $500 + 100 = $600

The formula for calculating future value with compounding:

FV = P (1 + r)^N

• FV = Future value
• P = Present value
• R = interest rate
• N = number of years

$500 X (1.1^2) = $605

To learn more about future value, please check: https://brainly.com/question/18760477

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