If You Have a Choice to Earn Simple Interest on $10,000

question 21

Multiple Choice

If you have a choice to earn simple interest on $10,000 for three years at 8% or annually compounded interest at 7.5% for three years which one will pay more and by how much?

• A) Simple interest by $50.00
• B) Compound interest by $22.97
• C) Compound interest by $150.75
• D) Compound interest by $150.00
• E) None of these.

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Definitions:

Magma

Molten rock beneath the Earth's surface, which can cool and solidify to form igneous rocks.

Pyroclastic Eruption

A volcanic eruption where hot fragments and magma are thrown into the air; also refers to a deposit or rock produced by such an event.

Dissolved Gas

Gas that is mixed in a solution, often referring to gases mixed in liquids such as water, which can affect water quality and marine life.

Porphyritic Texture

A texture in igneous rocks characterized by larger crystals, known as phenocrysts, embedded in a finer-grained matrix.