Answer:
see attached
Explanation:
You want the table filled in comparing account balances for 6% simple and compound interest over 4 years.
Simple interest formula
The balance of an account earning simple interest is ...
A = P(1 +rt)
where P is the initial amount invested, r is the annual interest rate, and t is the number of years.
Application
We have P = 7000 for both accounts. The 1-year formula becomes ...
A = P(1 +0.06·1) = 1.06P
The t-year formula for a principal of $7000 is ...
A = $7000(1 +0.06t)
Simple interest table
The first-year balance for the account earning simple interest is ...
A = 1.06($7000) = $7420
Each year, 6% of $7000 = $420 in interest is added to the account.
Compound interest table
The problem statement tells you to multiply each year's balance by the 1-year simple interest multiplier (1.06) to get the balance for the next year.
This means the year-4 balance in the compound interest account is ...
A = 1.06($8337.11) = $8837.34
Along the same lines, the year-2 balance will be found by dividing by that multiplier:
8837.11 = 1.06(year-2 balance)
year-2 balance = 8837.11/1.06 ≈ $7865.20
And the year-1 balance can be found the same way, or by matching the simple-interest number:
year-1 balance = $7865.20/1.06 = $7420 . . . from year-2 balance
year-1 balance = 1.06($7000) = $7420 . . . . . . same as simple interest
The filled-in table is attached.