Question

Hey! can you please help me with this question :)

Find the difference between simple interest and compound interest, compounded annually, on a deposit of $3,000 that earns 4.5% interest for 5 years.

Answer 1

The simple interest is 135$ per year, or 675$ total.
The compounded interest is 135$ the first year, 141.08$ the second year, 147.42$ the third year, 154.06$ the fourth year, and 160.99$ the fifth year, or 378.55$ total.