The difference between the interest Ben will earn in Account I and the interest Ben will earn in Account II at the end of 2 years is given by: Option B $1.32
How to calculate simple interest's amount?
If the initial amount (also called as principal amount) is P, and the interest rate is R% annually, and it is left for T years for that simple interest, then the interest amount earned is given by:
[tex]I = \dfrac{P \times R \times T}{100}[/tex]
How to calculate compound interest's amount?
If the initial amount (also called as principal amount) is P, and the interest rate is R% annually, and it is left for T years for that simple interest, then the interest amount earned is given by:
[tex]CI = P(1 +\dfrac{R}{100})^T - P[/tex]
For the given case, we've got: P = $1750, R = 2.75% and T = 2 years (for both simple and compound interest).
Interest earned in Account I (having simple interest) is calculated as:
[tex]I_1 = \dfrac{P \times R \times T}{100} = \dfrac{1750 \times 2.75 \times 2}{100} = 96.25 \: \text{in dollars}[/tex]
Interest earned in Account II (having compound interest) is calculated as:
[tex]I_2 = P(1 +\dfrac{R}{100})^T - P = 1750 (1.0275)^2 - 1750 =97.5734375 \text{\: (in dollars) }[/tex]
Thus, the difference in these interests is: [tex]I_2 - I_1 \approx 97.57 - 96.25 =1.32 \: \rm (in \: dollars)[/tex]
Thus, the difference between the interest Ben will earn in Account I and the interest Ben will earn in Account II at the end of 2 years is given by: Option B $1.32
Learn more about compound interest here:
https://brainly.com/question/11897800
