Answer:
$25,442.34
Explanation:
You want the total amount in two accounts at the end of 3 years when each starts with $12,000. One earns 2% annual simple interest; the other earns 1.95% annual interest compounded monthly.
Compound interest
The formula for the amount of an investment earning compound interest is ...
A = P(1 +r/n)^(nt)
where interest at rate r is compounded n times per year for t years.
Here, we have ...
A = $12,000(1 +0.0195/12)^(12·3) ≈ $12,722.34
Simple interest
The amount in an account earning simple interest is ...
A = P(1 +rt)
A = $12000(1 +0.02·3) = $12,720.00
Total
The total amount in the two investments after 3 years is ...
$12,722.34 +12,720 = $25,442.34
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