2. Jennifer and Chelsea each deposit $2,000 into accounts. Jennifer

deposits her money into a savings account that accrues simple interest at

a rate of 8%. Chelsea deposits her money into a savings account that

accrues compound interest at a rate of 6%, compounded monthly. *

2. Jennifer and Chelsea each deposit $2,000 into accounts. Jennifer

deposits her money into a savings account that accrues simple interest at  a rate of 8%. Chelsea deposits her money into a savings account that  accrues compound interest at a rate of 6%, compounded monthly.  How much interests do they each earn at the end of five years?

Solution:

a) Jennifer's Interest is $800

b) Chelsea's Interest is $697.70

Step-by-step explanation:

a) Simple Interest Formula =  Principal * Rate * Time

= $2,000 * 8% * 5 = $800

b) Compound Interest Formula =

A = P(1 + r/n})^{nt}

A=final amount

P=initial principal

r=interest rate

n=number of times interest applied per time period

t=number of time periods elapsed

Compound Interest = $697.70 ($2,000 *(6%/12)^60) - $2,000

c) Simple interest does not include the previous interest to the principal when calculating the interest for the following years.  Compound interest includes the interest to the principal in calculating the next year's interest.

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step-by-step explanation:

the answer is:

the answer is:

to solve the problem, we need to remember the quotient of power property, it's defined by the following relation:

if we have a quotienf of powers that have the same base, we need to keep the same base and subtract the exponent of the denominator power to the exponent of the numerator power.

so, we are given the expression:

then, calculating we have:

hence, the answer is:

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