Amanda deposits $10,000 into an account that pays 3% interest per year, compounded annually. Sam deposits $10,000 into an account that also pays 3% per year. But it is simple interest.

Question

Find the interest Amanda and Sam earn during each of the first three years. Then decide who earns more interest for each year.

Assume there are no withdrawals and no additional deposits.

Answer 1

Good grief!
At the same interest rate, compound interest will always give you more
after the first period, but if you insist .....

compound:
after 3 years,
amount = 10000(1.03)^3 = 10,927.27

simple:
after 3 years,
amount = 10000 + 10000(3)(.03) = 10,900.00