+12 Angela has deposited $8,000 into an account that pays 6% interest compounded annually.
Bob has deposited $10,000 into an account that pays 7% simple annual interest.
In 20 years Angela and Bob compare their respective balances. To the nearest dollar, what is the positive difference between their balances?
Thanks for the help!
Angela's Investment: FV =$8,000 x 1.06^20 =$25,657.08 - principal + interest over 20 years.
Bob's Investment: $10,000 x 0.07 =$700 - simple interest earned in 1 year.
$700 x 20 years =$14,000 - Total simple interest earned over 20 years.
$10,000 + $14,000 =$24,000 - Bob's total principal + interest over 20 years
$25,657.08 - $24,000 =$1,657.08 - difference in interest earned over 20 years.
