Question

Carter deposits $200 into a new savings account that pays 6% simple interest annually. Reese deposits $200 into a new savings account that pays 6% interest compounded annually. If both Carter and

Reese leave their $200 deposit in their accounts for 6 years, how much more will Reese's deposit eam in interest than Carters deposit
Explain all steps taken to solve the problem

Answer 1

$11.70

Explanation:

X= starting amount ($200)

R= interest rate (6%)

Y= years (6)

simple interest=
`X(1+ r^(y) )`

compounded interest=
`X(1+r)^(y)`