If the interest is compounded annually, then A = P*(1+r/n)^(n*t) A = 3000*(1+0.05/1)^(1*4) A = 3646.51875 which rounds to 3646.52 Call this value x, so x = 3646.52 ----------------------------------- If the interest is compounded using simple interest, then A = P*(1+r*t) A = 3000*(1+0.05*4) A = 3600 Call this value y, so y = 3600 ----------------------------------- Now subtract x and y x-y = 3646.52-3600 = 46.52 ----------------------------------- Therefore the answer is choice C) $46.52
