QuestionAnn deposits \$40,000 at 4\% compounded annually, while Jim deposits \$40,000 at 4\% simple interest. Calculate their interest for 3 years and compare.

Studdy Solution
The interest for Jim's account for the third year is the same as the first and second year, since it's simple interest.
$$= \$,600$$So, Ann earns more interest than Jim in each of the first three years.