suppose youre offered the following two accounts to invest $10,000 for 20 years: 16% simple interest and 4%…

suppose youre offered the following two accounts to invest $10,000 for 20 years: 16% simple interest and 4% interest compounded monthly. which is the best choice? part: 0 / 3 part 1 of 3 the future value of $10,000 using 16% simple interest is $ . round your answer to the nearest cent. do not round any intermediate steps.

suppose youre offered the following two accounts to invest $10,000 for 20 years: 16% simple interest and 4% interest compounded monthly. which is the best choice? part: 0 / 3 part 1 of 3 the future value of $10,000 using 16% simple interest is $ . round your answer to the nearest cent. do not round any intermediate steps.

Answer

Explanation:

Step1: Recall simple - interest formula

The simple - interest formula for future value $A$ is $A = P(1+rt)$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. Given $P=$10000$, $r = 0.16$, and $t = 20$. $A=10000\times(1 + 0.16\times20)$

Step2: Calculate the value inside the parentheses

First, calculate $0.16\times20=3.2$. Then $1+3.2 = 4.2$. $A = 10000\times4.2$

Step3: Find the future value

$A=$42000.00$

Answer:

$42000.00$