Answer:
$1,240.51
Explanation:
In this question, we have to compute the interest based on two methods i.e simple interest and the compound interest. The difference would be taken as an answer
Simple interest
= Principal × rate of interest × time period
= $6,500 × 6% × 10 years
= $3,900
Now the amount is
= $6,500 + $3,900
= $10,400
Compound interest
= Invested amount × (1 + interest rate)^number of years
= $6,500 × (1.06)^10
= $6,500 × 1.7908476965
= $11,640.51
The difference is
= $11,640.51 - $10,400
= $1,240.51
