Planters Bank pays 5 percent simple interest on its savings account balances,whereas Centura Bank pays 5 percent compounded annually.If you made a $12,000 deposit in each bank,how much more money would you earn from your Centura Bank account at the end of 20 years?
A)$7,155.84
B)$7,839.57
C)$7,960.47
D)$8,400.09
E)$8,784.14

Question

Quizplus · Accepted Answer

Future value _Planters = $12,000 + ($12,000 × 0.05 × 20) = $24,000Future value _{Centura Street} = $12,000 × (1 + 0.05)²⁰ = $31,839.57Difference = $31,839.57 - $24,000 = $7,839.57

Planters Bank Pays 5 Percent Simple Interest on Its Savings