Jamie deposits $1,000 into an account that pays 4% interest compounded annually. Chris deposits $1,000 into an account that pays 4% simple interest. Both deposits were made today. At the end of one year, both Jamie and Chris will have the same amount in their accounts.

Question

Quizplus · Accepted Answer

At the end of one year, both compounded and simple interest on $1,000 at a rate of 4% will yield the same amount of interest, $40, making both accounts equal.

Jamie Deposits $1,000 into an Account That Pays 4% Interest