First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually. If you made a deposit of $74,000 in each bank, how much more money would you earn from your Second City Bank account at the end of 8 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Difference in accounts

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Problem 5-1 Simple Interest versus Compound Interest [LO1]
First City Bank pays 8 percent simple interest on its savings account balances, whereas
Second City Bank pays 8 percent interest compounded annually. If you made a deposit
of $74,000 in each bank, how much more money would you earn from your Second City
Bank account at the end of 8 years? (Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)
Difference in accounts
Transcribed Image Text:Problem 5-1 Simple Interest versus Compound Interest [LO1] First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually. If you made a deposit of $74,000 in each bank, how much more money would you earn from your Second City Bank account at the end of 8 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Difference in accounts
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