Answer: $1398
Step-by-step explanation:
Given , Principal (P) = $12,500
Rate of interest for 1st year = 12% =0.12
Rate of interest for 2nd year = 15% =0.15
Rate of interest for 3rd year = 18% =0.18
Interest for first year =
=
= $1500
Now, For second year new principal
Interest for second year =
=
= $2100
Now, For third year new principal
Interest for third year =
=
= $2898
Difference between the compound interest of the first year and the compound interest for the third year. = $2898 - $1500 = $1398
Hence, the difference between the compound interest of the first year and the compound interest for the third year is <u>$1398 .</u>