Donna deposits $20,000 into an account that pays simple interest at a rate of 4% per year. Tony deposits $20,000 into an account that also pays 4% interest per year. But it is compounded annually. Find the interest Donna and Tony earn during each of the first three years. Then decide who earns more interest for each year. Assume there are no withdrawals and no additional deposits. Interest Donna earns Interest Tony earns Year Who earns more interest? (Simple interest) (Interest compounded annually) O Donna earns more. First O Tony earns more. O They earn the same amount. O Donna earns more. Second O Tony earns more. O They earn the same amount. O Donna earns more. Third O Tony earns more. O They earn the same amount.

College Algebra
1st Edition
ISBN:9781938168383
Author:Jay Abramson
Publisher:Jay Abramson
Chapter9: Sequences, Probability And Counting Theory
Section9.4: Series And Their Notations
Problem 62SE: Rachael deposits $1500 into a retirement fund each year. The fund earns 8.2% annual interest,...
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Donna deposits $20,000 into an account that pays simple interest at a rate of 4% per year.
Tony deposits $20,000 into an account that also pays 4% interest per year. But it is compounded annually.
Find the interest Donna and Tony earn during each of the first three years.
Then decide who earns more interest for each year.
Assume there are no withdrawals and no additional deposits.
Interest Donna earns
Interest Tony earns
Year
Who earns more interest?
(Simple interest)
(Interest compounded annually)
O Donna earns more.
O Tony earns more.
O They earn the same amount.
First
O Donna earns more.
O Tony earns more.
O They earn the same amount.
Second
O Donna earns more.
O Tony earns more.
Third
O They earn the same amount.
Transcribed Image Text:Donna deposits $20,000 into an account that pays simple interest at a rate of 4% per year. Tony deposits $20,000 into an account that also pays 4% interest per year. But it is compounded annually. Find the interest Donna and Tony earn during each of the first three years. Then decide who earns more interest for each year. Assume there are no withdrawals and no additional deposits. Interest Donna earns Interest Tony earns Year Who earns more interest? (Simple interest) (Interest compounded annually) O Donna earns more. O Tony earns more. O They earn the same amount. First O Donna earns more. O Tony earns more. O They earn the same amount. Second O Donna earns more. O Tony earns more. Third O They earn the same amount.
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