Find the simple interest for the period indicated.

Question

Then use table values to find the compound interest.​ Finally, find the difference between compound interest and simple interest. Round to the nearest cent.​ (Interest is compounded​ annually.)

​Principal: ​$3952  ​Rate: 10​% Years: 5

Answer 1

Simple interest is Principle x Rate x Time

Compound interest- sounds like you have a book with tables to refer to and you would look up the time period and rate to find a number and probably multiply that number by the principle.

Roughly without a table- year 1 interest= 3952x .10 x 1= 395.52

Year 2= (3952+ 395.52) x .10 x 1

And keep going with that formula adding the interest until you get to year 5.