Penelope needs to borrow $9000. She can borrow the money at 4.5% simple interest for 3 yr or she can borrow at 5% with interest

Question

Penelope needs to borrow $9000. She can borrow the money at 4.5% simple interest for 3 yr or she can borrow at 5% with interest compounded continuously for 3 yr.
(a) How much total interest would Penelope pay at 4.5% simple interest?
(b) How much total interest would Penelope pay at 5% interest compounded continuously?
(c) Which option results in less total interest?

Kunduz · Accepted Answer

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