Answer to Question #108669 in Financial Math for Paddy

Question #108669

Calculate the difference between the simple interest and the compound interest if R3 400 is invested at 10,5% p.a. for 6 years

Expert's answer

Simple interest:

"S=P(1+i\\times n)=3400(1+0.105\\times6)=5542"

Compound interest

"S=P(1+i)^n=3400(1+0.105)^6=6 189.36"

"\\Delta=6189.36-5542=" 647.36

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