Question
Ben deposits $400 into an account that earns 5% interest compounded annually. Sam deposits the same amount into an account that earns 5% simple interest. Compare the account balances after 2 years.
Answers
John
Simple interest
400(.05)(2) = $40
compound
400(1.05)^2
400(.05)(2) = $40
compound
400(1.05)^2