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The Simple Bank offers a 8 percent simple interest on deposited money. The Not-So-Simple Bank pays...

The Simple Bank offers a 8 percent simple interest on deposited money. The Not-So-Simple Bank pays 8 percent interest on deposited money, compounded annually.

  

You can deposit your money in either one of these two banks. If your deposit equals $65,000, by how much more will your money grow if you deposit it into The Not-So-Simple Bank, rather than The Simple Bank, for a total 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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Answer #1

simple interest=principal*interest rate*time period

=(65000*8%*8 years)

=$41600

Hence future value=simple interest+principal

=$41600+65000

=$106600

Not-So-Simple Bank:

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

A=$65000*(1.08)^8

=$65000*1.85093021

=$120310.46

Hence difference  =$120310.46-$106600

=$13710.46(Approx).

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