First City Bank pays 6 percent simple interest on its savings account balances,

Question

First City Bank pays 6 percent simple interest on its savings account balances, whereas Second City Bank pays 6 percent interest compounded annually.

If you made a deposit of $15,000 in each bank, how much more money would you earn from your Second City Bank account at the end of 8 years? (Do not round intermediate calculations and round your answer to 2 decimal places (e.g., 32.16).)

  
        Difference=

If you made a deposit of $15,000 in each bank, how much more money would you earn from your Second City Bank account at the end of 8 years? (Do not round intermediate calculations and round your answer to 2 decimal places (e.g., 32.16).)

Explanation / Answer

amount in first city bank at end of 8 years =15000 + 15000 * 8*6% = 22200

amount in second bank = 15000 * (1+0.06)^8 = 23907.72112

amount more earned by second bank = 23907.72112 - 22200 = 1707.72

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