Respuesta :
Answer:
$5.26
Explanation:
Given that,
Principle amount = $11,500
Interest rate = 0.55 percent
Time period = 6 years
For compound interest,
Future value = Present value × [tex](1+r)^{n}[/tex]
Future value = $11,500 × [tex](1+0.0055)^{6}[/tex]
= $11,500 × 1.03345
= $11,884.76
Compound interest:
= Future value - Principle amount
= $11,884.76 - $11,500
= $384.76
For Simple interest:
= Principle × Interest rate × Time period
= $11,500 × 0.0055 × 6
= $379.5
Hence, interest on interest:
= Compound interest - Simple interest
= $384.76 - $379.50
= $5.26
