Question

If $3000 is deposited in an account that pays 5% interest, what is the difference in the amount after 4 years between the amount earned if the principal is compounded annually and the amount earned calculated using simple interest

Answer 1

do you remember how simple interest is defined?

Answer 2

The simple interest = Principle x rate x time

Answer 3

the compound interest
= \[(principle)*(rate)^{time}\]

if they are compounded once per year