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Alexandra Thiebault
on Dec 09, 2024

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Jessica invests $3,000 in an account that pays 5% simple interest. How much more could she have earned over a 7-year period if the interest had compounded annually?

A) $122.20
B) $129.20
C) $147.80
D) $171.30
E) $221.30

Compounded Annually

A technique for computing interest in which the interest accrued annually is compounded to the principal amount, resulting in a balance that not only expands but does so at an accelerating pace.

Simple Interest

A method to calculate interest where the interest payment is a fixed percentage of the principal amount that does not change over the life of the loan or investment.

Interest

Interest is the cost of borrowing money, expressed as a percentage of the borrowed sum, paid by the borrower to the lender for the use of the money over a specified period.

  • Absorb the foundational concepts of compound and simple interest.
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Hamed MoralesDec 11, 2024
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