Nathan is opening a saving account that has a 10% simple interest rate. he deposits $75 in the account. after 5 years ,he will have $112.5 in his account . how much more would nathan earn after five years with a 10% compounded interest rate?

$8.29

Step-by-step explanation:

The formula for compound interest is:

A = P(1 + r)ⁿ

Data:

P = $75

r = 10 %

n = 5 yr

Calculations:

A = 75(1+ 0.10)⁵

  = 75 × 1.10⁵

  = 75 × 1.610 51

  = $120.79

At compound interest, Nathan will have $120.79 in his account.

At simple interest, he will have $112.50.

120.79 - 12.50 = $8.29

Nathan would earn $8.29 more at compound interest.

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