Simple vs. Compound Interest 2

Question

Bank account A begins with a deposit of 2000 dollars and earns 4.75% simple interest annually.
Bank account B also begins with 2000 dollars and earns 4.75% interest compounded annually.
Bank account C begins with 2000 dollars and earns 4.75% APR compounded monthly.

Years: 1
Account A:
Account B:
Account C:

Answer 1

A. 2,000 * .0475 = $95 interest

B. 2,000 * .0475 = $95 interest

C. 2,000*(1 = .0475/12)^12 = $2,097.10 or $97.10 in intersest

 

In the second or subsequent years, Band B and C will continue compounding