Algebra
posted by Sue Jackson on .
Compare the future amounts (A) you would have if the money were invested at simple interest and if it were invested with annual compounding.
$4,000 at 12% for 30 years
(a) Calculate the future amount if the money were invested at simple interest.
(b) Calculate the future amount if the money were invested with annual compounding. (Round your answer to the nearest cent.)

a. A = Po + Po*rt.
A = 4000 + 4000*0.12*30 = $18,400.
b. A = Po(1+r))^30
A = 4000(1,12)^30 = $119,839.69