Between simple interest at 8% and compound interest at 9%, find the higher resulting balance after investing $500 for a period of 10 years. Round the answer to two decimal places. (1 point)
To find the higher resulting balance, we can calculate the balance separately for both the simple interest and compound interest.
For simple interest, we can calculate the balance using the formula: balance = principal + (principal * rate * time).
Here, the principal is $500, the rate is 8% (or 0.08), and the time is 10 years.
So, for simple interest, the balance can be calculated as:
balance_simple = 500 + (500 * 0.08 * 10) = $900.
For compound interest, we can calculate the balance using the formula: balance = principal * (1 + rate)^time.
Here, the principal is again $500, the rate is 9% (or 0.09), and the time is 10 years.
So, for compound interest, the balance can be calculated as:
balance_compound = 500 * (1 + 0.09)^10 = $1228.34.
Therefore, the higher resulting balance after investing $500 for a period of 10 years is $1228.34.