a)
To find the value of the ammount we are going to have after 9 years of simple interest we use the formula:
[tex]A=P(1+rt)[/tex]where P is the principal, r is the interest rate in decimal form and t is the time we leave the money.
Then:
[tex]A=500(1+0.04\cdot9)=680[/tex]Therefore, after 9 years of simple interest we will have $680.00.
b)
To find the ammount we will have after 9 years of compound interest we use the formula:
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]where P is the principal, r is the interest in decimal form, n is the number of times the interest is compounded in a given time t.
Then:
[tex]A=500(1+\frac{0.04}{1})^{1\cdot9}=711.66[/tex]Therefore, after 9 years of compounded interest we will have $711.66.
