If $10,000 is invested at X percent simple annual interest for n years,which of the following represents the total amount of interest,in dollars,earned in n years?
the official answer is 10000n(x/100),but i think it should be 10000(x/100)n
That's the difference between compounded interest rate and simple interest rate. Simple interest rate will always apply to the original deposit. Compounded interest rate includes the generated interests in calculating the interests for the following period.
So the official answer is correct. For compounded annual interest, the answer would be 10,000*(1+x/100)^n
