Revision as of 23:03, 17 November 2023 by Admin (Created page with "'''Solution: B''' With simple interest, the deposit in Bank X earns 1000(0.07) = 70 in year 8. With compound interest, the earning in Bank Y in year 8 is <math display = "block"> 1000(1.0125)^{32}-1000(1.0125)^{28}=72.14. </math> The absolute difference is 2.14. {{soacopyright | 2023 }}")
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Exercise

ABy Admin
Nov 17'23

Answer

Solution: B

With simple interest, the deposit in Bank X earns 1000(0.07) = 70 in year 8. With compound interest, the earning in Bank Y in year 8 is

[[math]] 1000(1.0125)^{32}-1000(1.0125)^{28}=72.14. [[/math]]

The absolute difference is 2.14.

Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.

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