Question

I need help finding the answers between a, b, c and filing in the graph

Answer 1

Given

P = $6000

R = 6%

Find

Simple interest and compound interest for 5 , 10 and 15 years

Explanation

As we know the formula of simple interest and compound interest

$\begin{gathered} S.I=\frac{P\times R\times T}{100} \\ C.I=A-P,where \\ A=P(1+\frac{r}{100})^t \end{gathered}$

First we will find the simple interest for all three years.

$\begin{gathered} S.I=\frac{6000\times6\times5}{100}=1800 \\ S.I=\frac{6000\times6\times10}{100}=3600 \\ S.I=\frac{6000\times6\times15}{100}=5400 \end{gathered}$

Compound interest for 5 years

$\begin{gathered} C.I=P(1+\frac{r}{100})^t-P \\ C.I=6000(1+\frac{6}{100})^5-6000 \\ C.I=2029.35 \end{gathered}$

Compound interest for 30 years

$\begin{gathered} C.I=P(1+\frac{r}{100})^t-P \\ C.I=6000(1+\frac{6}{100})^{30}-6000 \\ C.I=28460.947 \end{gathered}$

Compound interest for 15 years

$\begin{gathered} C.I=P(1+\frac{r}{100})^t-P \\ C.I=6000(1+\frac{6}{100})^{15}-6000 \\ C.I=8379.34 \end{gathered}$

Final Answer

(a) Simple interest consistently earned more.

(b) Difference

in 5 years = 229.35

in 15 years = 2979.34

in 30 years = 17660.94

(c) As the time increases difference between simple and compound interest also increases.