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Answer:
a. $3000
b. 2840.25
c. compounded continuously
Explanation:
a. principal amount, p = $10000
Interest rate in the case of simple interest = 6%
Time, t = 5 years
Interest amount = Prt
Interest amount = 10000 x 6% x 5 = $3000
b. principal amount, p = $10000
Interest rate, r = 5%
Time, t = 5 years
Interest amount = Pe^(rt) - P
Interest amount = 10000 (2.71)^(5% x 5) - 10000
Interest amount = 2840.25
c. Compounded continuously has a lower interest amount.