Find the difference in balance between simple interest at 5% and composed interest at six percent when 900 is infested at a period of 5 years
304.40
225
79.40
1,204.40
The difference in balance between simple interest at 5% and compound interest at 6% when 900 is invested for a period of 5 years can be calculated as follows:
For simple interest at 5%:
Simple Interest = Principal * Rate * Time
Simple Interest = 900 * 0.05 * 5
Simple Interest = 225
For compound interest at 6%:
Compound Interest = Principal * (1 + Rate/100)^Time - Principal
Compound Interest = 900 * (1 + 0.06/100)^5 - 900
Compound Interest ≈ 1,204.40
The difference in balance = Compound Interest - Simple Interest
Difference = 1,204.40 - 225
Difference ≈ 979.40
Therefore, the difference in balance between simple interest at 5% and compound interest at 6% is approximately 979.40, which is closest to option 1,204.40.