First City Bank pays 5 percent simple interest on its savings account balances, whereas Second City Bank pays 5 percent interest compounded annually. If you made a deposit of $11,500 in each bank, how much more money would you earn from your Second City Bank account at the end of 12 years?
First City Bank pays 5 percent simple interest on its savings account balances, whereas Second City Bank pays 5 percent interest compounded annually. If you made a deposit of $11,500 in each bank, how much more money would you earn from your Second City Bank account at the end of 12 years?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 25P
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First City Bank pays 5 percent simple interest on its savings account balances, whereas Second City Bank pays 5 percent interest compounded annually.
If you made a deposit of $11,500 in each bank, how much more money would you earn from your Second City Bank account at the end of 12 years?
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