9514 1404 393
Answer:
A: A has $496.88 more
Step-by-step explanation:
A graphing calculator works this problem nicely.
The balance in the simple interest account after t years is ...
A = 1000(1 + 0.08t)
The balance in the compound interest account after t years is ...
B = 800(1 +0.05)^t
The larger starting balance and the higher interest rate keep the A account balance higher than the B account balance for more than 29 years. Then, the effect of interest compounding takes over. Until then, account A has more money in it. The calculator shows Account A has $496.88 more after 10 years.
