Miguel deposits $1, 000 into a new savings account that pays 4% simple interest annually. Valeria deposits $1, 000 into a new savings account that pays 4% simple interest compounded annually. After 4 years, what will be the difference between the interest earned on Miguels $1, 000 deposit and the interest earned on Valerias $1, 000 deposit?

COMPOUND INTEREST

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Miguel deposits $1, 000 into a new savings account that pays 4% simple interest annually. Valeria deposits $1, 000 into a new savings account that pays 4% simple interest compounded annually. After 4 years, what will be the difference between the interest earned on Miguel’s $1, 000 deposit and the interest earned on Valeria’s $1, 000 deposit?

A	$0.73
B	$9.86
C	$35.14
D	$48.85

Explanation:

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ECONOMICS (CBSE/UGC NET)

ECONOMICS

COMPOUND INTEREST