You decide you want to lend your friend $1234 for 3 years using 10%. calculate how much does your friend have to pay you back with simple interest vs. compounding interest?

With simple interest = $1,604.2

With compound interest = $1,642.454

Explanation:

Data provided in the question:

Amount lend = $1,234

Time = 3 years

Rate of interest, r = 10% = 0.10

Now,

With simple interest :

Interest = Principle × Rate × Time

= $1,234 × 0.10 × 3

= $370.2

Therefore,

Total amount paid = Principle + Interest

=  $1,234 + $370.2

= $1,604.2

With compound interest :

Amount to be paid = Principle × ( 1 + r )ⁿ

= $1,234 × ( 1 + 0.10 )³

= $1,234 × 1.1³

= $1,234 × 1.331

= $1,642.454

n

explanation:

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.