You invest $$800$ at an annual rate of $8\%$ for $12$ years. How much more interest would you earn with compound interest than with simple interest for $($a$)$ the whole $12$ years; and $($b$)$ in just year $7$ by itself?

COMPOUNND VS$.$ SIMPLE INTEREST

ANNUAL RATE

AMOUNT TODAY

$8\mathrm{.}00\%$

$$800\mathrm{.}00$

$12$

$7$

ENDING YEAR

$$800\mathrm{.}00$

SINGLE YEAR WITHIN FULL PERIOD

$12$

TOTAL INTEREST FOR FULL PERIOD

$7$

TOTAL INTEREST FOR FULL PERIOD

SIMPLE INTEREST FOR EACH AND EVERY YEAR

SIMPLE INTERES$$ FOR FULL PERIOD

MORE COMPOUND INTEREST THAN SIMPLE FOR FULL PERIOD

COMPOUND INTEREST FOR SINGLE YEAR WITHIN FULL PERIOD

MORE COMPOUND INTEREST THAN SIMPLE FOR SINGLE YEAR