At the end of two years, what is the difference between the interest earned on a deposit of $3,000 at 6.5% simple interest and 6.5% interest compounded annually?$12.68$390.00$16.28$93.68

To solve this problem, we first need to understand the difference between simple interest and compound interest.

1. Simple Interest: This is calculated on the original principal only. The formula for simple interest is I=Prt, where I is the interest, P is the principal (initial amount), r is the rate of interest, and t is the time.

2. Compound Interest: This is calculated on the initial principal and also on the accumulated interest of previous periods. The formula for compound interest is A=P(1+r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.

Now, let's calculate:

Simple Interest: I = Prt I = 30000.0652 I = $390

Compound Interest: A = P(1+r/n)^(nt) A = 3000(1+0.065/1)^(1*2) A = 3000(1.065)^2 A = $3403.68

The interest earned is the final amount minus the principal, so the compound interest earned is $3403.68 -$3000 = $403.68.

Finally, the difference between the compound interest and the simple interest is $403.68 -$390 = $13.68. So, the correct answer is$13.68.