Serenity wants to invest $25000 of her savings for her retirement fund. determine the difference in interest earnings between a 10% simple interest rate and a 7% compound interest rate with interest being compounded annually if Serenity invests her money for 25 years. Round the answer to the two decimal places as needed.

Question

Serenity wants to invest $25000 of her savings for her retirement fund. determine the difference in interest earnings between a 10% simple interest rate and a 7% compound interest rate with interest being compounded annually if Serenity invests her money for 25 years. Round the answer to the two decimal places as needed.

Answer 1

Answers for this practice areeeee..

1. 2,160
2. 36,600
3. 15'919.20
4. 2
5. 48,185.13
Enjoyy(つ≧▽≦)つ

Answer 2

number 5 was wrong.... here are the correct answers :)

1. 2,160
2. 36,600
3. 15'919.20
4. 2
5) 48,185.82

Answer 3

That is incorrect

Answer 4

Apologies for the incorrect calculations. Let's recalculate the interest earnings correctly.

For simple interest, the formula is still:

Interest = Principal * Rate * Time

Interest = $25000 * 10% * 25
Interest = $25000 * 0.10 * 25
Interest = $62500

For compound interest, the formula is:

Compound Interest = Principal * (1 + Rate)^Time - Principal

Compound Interest = $25000 * (1 + 7%)^25 - $25000
Compound Interest = $25000 * (1 + 0.07)^25 - $25000
Compound Interest = $25000 * (1.07)^25 - $25000
Compound Interest = $25000 * 2.60103266533 - $25000
Compound Interest = $65025.82 - $25000
Compound Interest = $40025.82

Now, let's find the difference in interest earnings:

Difference = Compound Interest - Simple Interest
Difference = $40025.82 - $62500
Difference = -$22474.18

Therefore, the correct difference in interest earnings between a 10% simple interest rate and a 7% compound interest rate, with interest being compounded annually, if Serenity invests her money for 25 years, is -$22,474.18.

Answer 5

To calculate the simple interest, we use the formula:

Interest = Principal * Rate * Time

For the simple interest rate of 10% over 25 years:

Interest = $25000 * 10% * 25 = $62500

To calculate the compound interest, we use the formula:

Compound Interest = Principal * (1 + Rate)^Time - Principal

For the compound interest rate of 7% over 25 years:

Compound Interest = $25000 * (1 + 7%)^25 - $25000

Let's calculate the compound interest:

Compound Interest = $25000 * (1 + 0.07)^25 - $25000
= $25000 * (1.07)^25 - $25000
= $25000 * 3.86968488214 - $25000
= $96742.12 - $25000
= $71742.12

Now, let's find the difference between the interest earnings:

Difference = Compound Interest - Simple Interest
= $71742.12 - $62500
= $9242.12

Therefore, the difference in interest earnings between a 10% simple interest rate and a 7% compound interest rate, with interest being compounded annually, if Serenity invests her money for 25 years, is $9242.12.