Account A pays 4.04% simple interest and Account B pays x% interest compounded semiannually. The interest earned from a principal of $10000 from both accounts at the end of the first year is equal.
Quantity A
x
Quantity B
3.8
I solve it as follows :
since 10K in both is P I cancel It.
I am left with
(4.04/100)=(x/4)^2
X=40%
May someone clarifies what is the mistake in my solution ?
Source: TTP
A=P[1+(\frac{r}{n})]^{nt} → CI
A = P(1 + r\times t) → SI
r \times t = (\frac{r}{n})^{nt} where (r = decimal)
.0404 \times 1=(\frac{x}{200})^{2}
1616 = x^2
40.19 = x
Does that mean it is 4019% ?
SI = CI
P * ( R / 100) = P(1 + R/100)ᵗ - P
divide P throughout
r/100 = (1+r/100)ᵗ - 1
4.04/100 = (1+x/100)² - 1
0.0404 = (1+x/100)² - 1
1.0404 = (1+x/100)²
square root both sides
1.02 = 1 + x/100
0.02 = x/100
x = 2
quantity B greater.