Question

Luke invested $2400 in two accounts. The first account pays 3% simple interest. The second account pays 3% compound interest with interest compounded annually(at the end of each year) After 10 years how much will the second account be worth than the first account?

Answer 1

The first account would be 720 in simple interest and the second account would be 3238.32 so subtracting would give 2518.32 more with than the first account. Comment if you need the full workings

Answer 2

The second account (compound interest) is worth more than the first account (simple interest) is $105.4.

What is compound interest?

Compound interest is the interest on a loan or deposit calculated based on the initial principal and the accumulated interest from the previous period.

What is simple interest?

Simple interest is the concept that is used in many companies such as banking, finance, automobile, and so on.

Luke invested $2400 in two accounts.

The first account pays 3% simple interest.

The second account pays 3% compound interest with interest compounded annually(at the end of each year) After 10 years.

The interest from the first account will be

$\rm Simple \ Interest = \dfrac{2400*3*10}{100} = \ 720$

The interest from the second account will be

$\rm Compound \ interest = 2400(1.03)^{10} - 2400\\\\Compound \ interest = \ 825.4$

Then the second account be worth more than the first account will be

→ $825.4 – $720 = $105.4

More about the compound interest link is given below.

https://brainly.com/question/25857212