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Home > MC2 > Chapter 11 > Lesson 11.2.4 > Problem 11-74


Tim wants to invest some money that his grandmother gave him. He has and can put it in an account with simple interest or an account with compound interest.

  1. The simple interest account is for 5 years with an interest rate of . Use the formula to find the interest he earned at the end of five years. How can you use the interest to calculate the total amount in the account at the end of 5 years? What is the total?

    Add the interest he earns to his initial principal to find the total amount he would have after 5 years.

  2. The compound interest account is also for 5 years (compounded yearly) at an interest rate of . Find the total in the account using the formula . What is the total?

  3. Which account is a better investment?

    Which account has more money after 5 years?