Comparing savings plans

Comparing savings plans

Secondary 3
5 marks
TGM Original Questions

A saver deposits \(\$2000\) for \(3\) years. Plan A pays compound interest at \(3\%\) per year. Plan B pays simple interest at \(3.2\%\) per year. There are no fees, deposits or withdrawals during the \(3\) years.

Which plan gives the greater final amount, and by how much? Give the difference to the nearest cent.[5]

Solution:

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Answer:Plan B, by \(\$6.55\).

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