Triple Town Bank Pays 3 8 Percent Simple Interest On Its Savings Accounts Double (1)

Triple Town Bank pays 3.8 percent simple interest on its savings accounts. Doubleton Bank pays 3.5 percent interest, compounded annually on its savings accounts. Sixteen years ago, Jake invested $2,000 in each bank. What is the difference, if any, in his account balances today?

Under Simple Interest, the interest portion is calculated as – Principal * Rate * period= (2000 * .038 * 16) = $1216. Total amount in account = 2000+1216 = $3216Under annual compounding, future…

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