Question

April and Cody invest $5,000 each at their local bank. April invests at a 4% simple interest rate, and Cody invests at a 4% interest rate, compounded annually. What is the difference in their account balances after three years?

Answer 1

• $24.32

Explanation:

The difference in balances is:

• 5000*(1 + 0.04)^3 - 5000*(1 + 0.04*3) =
• 5624.32 - 5600 =
• 24.32