OK, Tet me see what I can do... Future Value of Account A Note: Account A pays simple interest. Future ValueA PrincipalInterest Principal[(Principal x Interest Rate) x Investment Period] - $2,000 [$2,000 x 8%) x 3 years] $ Future Value of Account X Note: Account X pays compound interest. Future Valuex Present Value x Interest Rate Factor = Present Value x (1 + Interest Rate)N $2,000 x (1 +0.08)3 To find the interest rate factor, you can use four different ways, including multiplying it out: (10.08) x (1 + 0.08) x (1 +0.08) Interest Factor 1.2597 - = Or you can use exponents, and calculate it directly: (10.08)3 1.2597 Interest Factor - = The third alternative for solving the equations is to use a spreadsheet, and the fourth is to let a financial calculator perform the calculation. This requires that you know how your calculator functions and how to enter the following variables: 8% 2000 Input 1 T EV P/Y N PV Keystroke Output Answer P/Y indicates the number of compounding periods per year, N is the number of years, I is the interest rate, PV is present value, and FV is future value. Difference in Future Values FVx FVA Difference $