Question

5 Ben deposited $10,000 into each of two savings accounts. Account I 4% Compounded Annually Account II 3% Compounded Annually Ben does not make any more deposits or withdrawals. How much more money will be in account I than account II at the end of 3 years?​

Answer 1

There will be $312.37 more in Account I.

Explanation:

Giving the following information:

Initial investment= $10,000

Number of periods= 3 years

To calculate the future value, we need to use the following formula:

FV= PV*(1+i)^n

Account I:

FV= 10,000*(1.04^3)

FV= $11,248.64

Account II:

FV= 10,000*(1.03^3)

FV= $10,927.27

There will be $312.37 more in Account I.