You invested $6,500 in an account that pays 6 percent simple interest. How much more could you have earned over a 10-year period if the interest had compounded annually? A. $1,049.22 B. $1,182.19 C. $1,240.51 D. $1,201.15

I will earn $1,240.51 more interest.

Explanation:

Amount Invested = $6,500

Rate of interest = 6% = 0.06

Number of years = 10 years

Number of months = 10 x 12 = 120 months

Simple Interest:

Interest Amount = $6,500 x 6% x 10 = $3900

Compounding Interest

Interest Amount = $6,500 x (((1+0.06)^10)-1) = $5,140.51

Extra amount earned = 5,140.51 - 3,900 = $1,240.51

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