Benjamin receives an annual bonus of $1,000 and wants to invest it in an account that earns interest for the next 3 years. Below are the two options that he is considering putting his money into. Which of the following statements is true? Bank A 5% Simple Interest Bank B 5% Interest Compounded Annually Simple Interest: / = Prt ; Compound interest A=P(1+r): O After 3 years, Bank B will pay Benjamin $1875 more than Bank B. O After 3 years, Bank B will pay Benjamin $3000 more than Bank A. O After 3 years, Bank B will pay Benjamin $1007.63 more than Bank A. O After 3 years, Bank B will pay Benjamin $7.63 more than Bank A. O After 3 years, Bank A will pay Benjamin $10.13 less than Bank B.
Benjamin receives an annual bonus of $1,000 and wants to invest it in an account that earns interest for the next 3 years. Below are the two options that he is considering putting his money into. Which of the following statements is true? Bank A 5% Simple Interest Bank B 5% Interest Compounded Annually Simple Interest: / = Prt ; Compound interest A=P(1+r): O After 3 years, Bank B will pay Benjamin $1875 more than Bank B. O After 3 years, Bank B will pay Benjamin $3000 more than Bank A. O After 3 years, Bank B will pay Benjamin $1007.63 more than Bank A. O After 3 years, Bank B will pay Benjamin $7.63 more than Bank A. O After 3 years, Bank A will pay Benjamin $10.13 less than Bank B.
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 1E
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Benjamin receives an annual bonus of $1,000 and wants to invest it in an account that earns interest for the next 3 years. Below are the two options that he is considering putting his money into. Which of the following statements is true?
Second time submitting please make asap
Dont mind bubled answer was accident.
Transcribed Image Text:Benjamin receives an annual bonus of $1,000 and wants to invest it in an account that earns interest for the next 3 years. Below are the two options that he
is considering putting his money into. Which of the following statements is true?
Bank A
5% Simple Interest
Bank B
5% Interest Compounded Annually
Simple Interest: / = Prt ; Compound interest A=P(1+r):
O After 3 years, Bank B will pay Benjamin $1875 more than Bank B.
O After 3 years, Bank B will pay Benjamin $3000 more than Bank A.
O After 3 years, Bank B will pay Benjamin $1007.63 more than Bank A.
O After 3 years, Bank B will pay Benjamin $7.63 more than Bank A.
O After 3 years, Bank A will pay Benjamin $10.13 less than Bank B.
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