Julie deposited 10,000 in each of Bank 1 and Bank 2. Bank 1 credits simple interest at an annual  rate of 10% for the first five years and 5% thereafter. Bank 2 credits interest at an annual nominal rate  of 4% compounded quarterly. The interest credited in the eighth year by Bank 2 exceeds the interest credited in the eighth year by  Bank 1 by ?. Calculate the absolute value of ?.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
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Julie deposited 10,000 in each of Bank 1 and Bank 2. Bank 1 credits simple interest at an annual 
rate of 10% for the first five years and 5% thereafter. Bank 2 credits interest at an annual nominal rate 
of 4% compounded quarterly.
The interest credited in the eighth year by Bank 2 exceeds the interest credited in the eighth year by 
Bank 1 by ?.
Calculate the absolute value of ?.

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