Question

A savings account at Bank A pays 5% simple interest. An account at Bank B pay 2% compound interest. The table shows the balance in each account after an initial deposit $1000.

Which describes the balance after a long period of time?

Answer 1

The answer is B. The balance in bank b will be greater

Answer 2

option B.

Explanation:

given,

Bank A pays 5% simple interest

Bank B pays 2% compound interest

both Bank has initial deposit of $1000.

when we look at the table the growth in the 5 years are given.

but when we look for long period of time

company B will be have balance more than company A after long period of time.

hence, the correct answer is option B.