Jeff deposits $3,000 into an account which pays 2.5 percent interest,compounded annually.At the same time,Kurt deposits $3,000 into an account paying 5 percent interest,compounded annually.At the end of three years:
A)Both Jeff and Kurt will have accounts of equal value.
B)Kurt will have twice the money saved that Jeff does.
C)Kurt will earn exactly twice the amount of interest that Jeff earns.
D)Kurt will have a larger account value than Jeff will.
E)Jeff will have more money saved than Kurt.

Question

Quizplus · Accepted Answer

After three years, Jeff's account will have an ending balance of $3,232.05 ($3,000 x 1.025^3). Kurt's account will have an ending balance of $3,608.96 ($3,000 x 1.05^3). Therefore, Kurt will have a larger account value than Jeff does.

Jeff Deposits $3,000 into an Account Which Pays 2