if $1500 is deposited in an account that pays 4% interest, what is the difference in
the amount after 3 years between the amount earned if the principal is compounded
annually and the amount earned calculated using simple interest?

The Difference between Amount earned from Compound Interest and amount earned from Simple Interest is $7.2  

Step-by-step explanation:

Given as :

The Principal deposited in an account = $ 1500

The annual rate of interest = 4%

The time period = 3  years

From compounded method

Amount = principal ×

Or, Amount = $1500 ×

Or, Amount = $1500 × ( 1.04 )³

∴   Amount = $1500 × 1.1248

I.e  Amount = $1687.2

From Simple Interest method

Simple interest =

Or, Simple interest =  

Or, Simple interest =  

∴   Simple interest = $180

So, Amount = Interest + Principal

     Amount = $180 + $1500

I,e  Amount = $1680

Difference between Amount earned from CI and amount earned from SI = $1687.2 - $1680 = $7.2  

Hence The Difference between Amount earned from Compound Interest and amount earned from Simple Interest is $7.2    Answer

step-by-step explanation:

true !

step-by-step explanation: