Question

Gina deposits $2,000 into each of two savings accounts.

• Account I earns 5% annual simple interest.
• Account II earns 5% interest compounded annually.


Gina does not make any additional deposits or withdrawals. What is the sum of the balances of Account I and Account II at the end of 3 years?




PLS HELP ME. I WILL GIVE 40 POINTS.

Answer 1

Simple interest:

• $2000*(1 + 3*0.05) = $2300

Compound interest:

• $2000*(1 + 0.05)^3 = $2315.25

Sum of the balances:

• $2300 + $2315.25 = $4615.25