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First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually. If you made a deposit of $12,000 in each bank, how much more money would you earn from your Second City Bank account at the end of 9 years?

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Willchemistry

hey there!:

First city bank = $64,000 deposited for 9 years at 7% with simple interest then after 9 years I will have a total of $104,320

Second city bank = $64,000 deposited for 9 years at 7% with compound interest then after 9 years I will have a total of $117,661.39.

Therefore we will make $13,341.39 more through the second city bank.

Hope this helps!

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