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21 August, 01:23

You invested $6,500 in an account that pays 6 percent simple interest. How much more could you have earned over a 10-year period if the interest had compounded annually? A. $1,049.22 B. $1,182.19 C. $1,240.51 D. $1,201.15

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  1. 21 August, 04:33
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    I will earn $1,240.51 more interest.

    Explanation:

    Amount Invested = $6,500

    Rate of interest = 6% = 0.06

    Number of years = 10 years

    Number of months = 10 x 12 = 120 months

    Simple Interest:

    Interest Amount = $6,500 x 6% x 10 = $3900

    Compounding Interest

    Interest Amount = $6,500 x (((1+0.06) ^10) - 1) = $5,140.51

    Extra amount earned = 5,140.51 - 3,900 = $1,240.51
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