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Cedric has deposited $12,000 into an account that pays 5% interest compounded annually. Daniel has deposited $12,000 into an account that pays 7% simple annual interest. In 15 years Cedric and Daniel compare their respective balances. To the nearest dollar, what is the positive difference between their balances?

 

 

Thanks!

 

 

Edit: Anyone?

edited by AnonymousConfusedGuy  Dec 1, 2017
 #1
avatar+92892 
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Cedric has deposited $12,000 into an account that pays 5% interest compounded annually. Daniel has deposited $12,000 into an account that pays 7% simple annual interest. In 15 years Cedric and Daniel compare their respective balances. To the nearest dollar, what is the positive difference between their balances?

 

Balances after 15 years:

 

Cedric

\(12000(1+0.05)^{15}=12000*1.05^{15}=$24,947.14\)

 

Daniel:

interest = PRT = 12000*0.05*15=$9000

End amount = 12000+9000 = $23000

 

So the difference is   $24,947 - $23000 = $1947

Melody  Dec 3, 2017
 #2
avatar+1442 
+2

Thanks so much!


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