Western bank pays 5 percent simple interest on its savings account balances, whereas eastern bank pays 5 percent compounded annually. if you deposited $6,000in each bank, how much more money would you earn from the eastern bank account at the end of 3 years?

Simple interest is computed by multiplying 6,000 by 0.05 (5%) 3 times and adding the total of the products and 6,000. This yields a total of 6,900. Compound interest is computed by multiplying 6,000 by 0.05 to get 6,300. Then 6,300 will be multiplied by 0.05 to get 6615. 6615 is multiplied again by 0.05 to get 6945.75. To get the difference, simply subtract 6945.7 to 6900. With this, one can earn $45.75 more annually if he or she invests in eastern banked as compared to if he or she invests in western bank.