Answer:
The correct answer is $3300 for simple interest and $3312.24 for compound interest.
Step-by-step explanation:
Income as working as a lifeguard = $3000
We deposit the money in a bank which offers 2% interest annually for a period of 5 years.
Case 1 : Calculating simple interest for the given situation.
Amount after 5 years = 3000 + 3000 × 2 × 5 × [tex]\frac{1}{100}[/tex] = $ ( 3000 + 300) = $3300.
Case 2 : Calculating compound interest for the given situation.
Amount after 5 years = 3000 × [tex](1 + \frac{2}{100} ) ^{5}[/tex] = $ 3312.24.
Thus the amount after 5 years amount simply is $3000 and compoundly is $3312.24
