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First City Bank pays 9 percent simple interest on its savings account balances, whereas Second City Bank pays 9 percent interest compounded annually. If you made a deposit of $7,500 in each bank, how much more money would you earn from your Second City Bank account at the end of eight years?

Respuesta :

Answer:

Amount which is earned from bank B will be $7444.21

Explanation:

We have given principal amount P = $7500

Rate of interest r = 9 %

We have to find the interest after 8 years

Total amount after 8 year is given by

[tex]A=P(1+\frac{r}{100})^n=7500\times (1+\frac{9}{100})^8=7500\times 1.99256=$14944.21[/tex]

So the amount which he earn more = $14944.21 - $7500 = $7444.21

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