Question
Bank C promises to pay a compound annual interest rate of 6 percent, while Bank S pays a 12 percent simple annual interest rate on
Bank C promises to pay a compound annual interest rate of 6 percent, while Bank S pays a 12 percent simple annual interest rate on deposits. If you deposit $1,000 in each bank, after 25 years, your deposit in Bank C equals ________, while your deposit in Bank S equals ________.
$4,292; $4,000
$4,000; $4,292
$3,292; $3,000
$2,500, $17,000
I have calculated for Bank C and got = $4291.8 ---> $1000 x (1+0.06)^25
however am not very sure of my calculation and for Bank S I got $3000--> $1000 x (0.12) = 120 , $120 x 25 = $3000
am quite confused on where am going wrong with my calculation.
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