Simple Interest = PRT/100
P = $3000
R=4.5
T=5
substitute into the formula
[tex]\text{Simple Interest =}\frac{3000\times4.5\times5}{100}[/tex][tex]=675[/tex]Simple interest = $675
Compound interest
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]P=3000
r = 0.045
n=1
t=5
[tex]A=3000(1+\frac{0.045}{1})^{1\times5}[/tex][tex]=3000(1.045)^5[/tex][tex]=3738.55[/tex]A = P + I
3738.55 = 3000 + I
I = 738.5458
compound interest= $738.5458
But we were asked to find the difference between simple interest and compound interest
$735.5458 - $675 = $60.5458 ≈ $60.55
