Taylor plans to use $2100 to open a savings account with an annual interest rate of 1.85%. How much more interest will he earn over 8 years if he chooses a compound interest account that compounds interest annually instead of a simple interest account? Round your answer to the nearest cent.

Taylor will earn $21 more in compounded interest than in simple interest.

Given:

Principal = 2100

interest rate = 1.85%

term = 8 years

Simple Interest = Principal * interest rate * term

= 2100 * 1.85% * 8

= 310.80

Compounded Interest = Principal * (1+r) ^t

= 2100 * 1.0185⁸

= 2100 * 1.158

= 2431.80

Interest from Compounded Interest : 2431.80 - 2100 = 331.80

Simple Interest = 310.80

Compounded Interest = 331.80

331.80 - 310.80 = 21