Check my work mode : This shows what is correct or Incorrect for the work you ha

Question

Check my work mode : This shows what is correct or Incorrect for the work you have First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually. 10 points If you made a $58,000 deposit 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.) & Answer is complete but not entirely correct. Difference in 326,246 28 lor 10 Next > fab

Explanation / Answer

It is simple Compounding formula to be used here

For Compound Interest

Rate = 8%

Amount to be deposited = 58000

Time = 8 years

Amount after 8 years = P*(1+r)^t

Amount after 8 years = 58000*(1.08)^8 = 107,353.95

For simple interest

Interest = P*r*t

Interest = 58000*0.08*8 = 37120

Amount after 8 years = 58000 + 37120 = 95,120

Difference in amount = 107353.95 - 95120 = 12,233.95

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