Beatrice is investing $5,000 in an account that pays 4 percent simple interest.How much more could she have earned over a period of 10 years if the interest had compounded annually?

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Ending value _{Simple interest}= $5,000 + ($5,000 × 0.04 × 10)= $7,000.00 Ending value _Compounded = $5,000 × (1 + 0.04)¹⁰ = $7,401.22 11ea5bb7_de36_8878_8724_355dc7c4187e_TB1005_00 Difference = $7,401.22 - 7,000.00 = $401.22

Beatrice Is Investing $5,000 in an Account That Pays 4