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You have $50000 to invest. Investment product A can offer you an annual compound interest at 2.5%, while investment product B can offer you an annual simple interest at 5%. If you choose investment product B, how much additional or less money you will receive after 10 years of investment? Use positive value if investment product B returns more money and negative value if investment product A returns more money. You can round to the nearest integer.

Respuesta :

estebancgo

Answer:

-1.504

Explanation:

the key here is to see that there are providing two types of interest rates, for Fund A we have an anually compunded, and for Fund B we have simple inerest, so let´s first calculate the accumulated value after 10 years:

[tex]Fund A=50.000*(1+0.025)^{10}[/tex]

[tex]Fund A=64.004,23[/tex]

and by the other side for Fund B:

[tex]Fund B=50.000*(1+0.025(10))[/tex]

[tex]Fund B=62.500[/tex]

so, as it is requested the answer will be 62.500-64.004,23 it equals to -1.504,23 rounded -1.504

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