SOLUTION: A $3000 investment earns simple interest at 8% for 48 months. What is the difference in interest earned if it was compounded annually at 8% instead? Thanks

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Question 1131500: A $3000 investment earns simple interest at 8% for 48 months. What is the difference in interest earned if it was compounded annually at 8% instead?

Thanks
Answer by josmiceli(19441) About Me  (Show Source):
You can put this solution on YOUR website!
+I%5B1%5D+=+P%2Ar%2At+
+I%5B1%5D+=+3000%2A.08%2A4+
+I%5B1%5D+=+960+
----------------------
+A+=+P%2A%28+1+%2B+r%2Fn+%29%5E%28n%2At%29+
+A+=+3000%2A%28+1+%2B+.08%2F1+%29%5E%28+1%2A4+%29+
+A+=+3000%2A1.08%5E4+
+A+=+3000%2A1.3605+
+A+=+4081.47+
+I%5B2%5D+=+4081.47+-+3000+
+I%5B2%5D+=+1081.47+
---------------------------------
+1081.47+-+960+=+121.47+
$121.47 difference
I'm assuming both interest rates are annual rates
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