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Gina deposits $2,000 into each of two savings accounts.

• Account I earns 5% annual simple interest.
• Account II earns 5% interest compounded annually.


Gina does not make any additional deposits or withdrawals. What is the sum of the balances of Account I and Account II at the end of 3 years?




PLS HELP ME. I WILL GIVE 40 POINTS.

User Pushpendre
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1 Answer

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Answer:

Simple interest:

  • $2000*(1 + 3*0.05) = $2300

Compound interest:

  • $2000*(1 + 0.05)^3 = $2315.25

Sum of the balances:

  • $2300 + $2315.25 = $4615.25
User Mohsin Awan
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