Question: Consumer Mathematics Calculating and comparing simple interest and compound interest Ann deposits $10,000 into an account that pays simple interest at a rate of

Consumer Mathematics Calculating and comparing simple interest and compound interest Ann deposits

Consumer Mathematics Calculating and comparing simple interest and compound interest Ann deposits $10,000 into an account that pays simple interest at a rate of 4% per year. Jim deposits $10,000 into an account that also pays 4% interest per year. But it is compounded annually. Find the interest Ann and Jim earn during each of the first three years. Then decide who earns more interest for each year. Assume there are no withdrawals and no additional deposits. Year Interest Ann earns (Simple interest) Interest Jim earns First $ (Interest compounded annually) $ Second $ $ Third $ $ Who earns more interest? Ann earns more. O Jim earns more. O They earn the same amount. Ann earns more. O Jim earns more. O They earn the same amount. Ann earns more. O Jim earns more. O They earn the same amount.

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