Huan deposited $850 into a collegesavings account earning 4.8% interestcompounded annually. He also deposited$850 into a second account earning 4.8%simple interest. He made no additionaldeposits. After 10 years, which account earnedmore interest? How much more?
A The account with compounded interest earned
$1,0004.10 more interest.
B The account with the simple interest earned
$1,004.10 more interest.
C The account with the simple interest earned
$100.41 more interest.
D The account with compounded
interest earned $100.41 more
interest.
I am really having trouble with this and cant guess a thing.
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1 answer

Compounded Int.
P1 = Po(1+r)^n
r = 4.8%/100 = 0.048 = Annual % rate expressed as a decimal.
n = 1Comp./yr. * 10Yrs. = 10 Compounding
periods.
P1 = 850(1.048)^10 = $1358.41
Simple Int.
P2 = Po + Po*r*t = 850 + 850*0.048*10 =
$1258.00
P1P2 = 1358.41  1258 = $100.41 👍
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answered by Henry
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