Question

The formula for determining interest compounded monthly is A = P(1 + )12t, where A represents the amount invested after t years, P the principal invested, and r the interest rate. Jimmy invests $2,000 at an interest rate of 10% for 4 years, while Jenny invests $2,000 at an interest rate of 5% for 8 years.

Answer 1

determine the amount gained by jenny and jimmy

Answer 2

something's missing in your formula...

Answer 3

its P(1+r/12)^12t

Answer 4

The general formula for compound interest:

\[A = P(1 + \frac{r}{n})^{nt}\]

Answer 5

For Jimmy:

P = 2000
n = 12
r = .10
t = 4

For Jenny
P = 2000
n = 12
r = .05
t = 8

r = interest rate
n = number of months in a year interest is compounded
t = number of years of investment

Answer 6

You should be able to figure it out from there.

Answer 7

how did you arrive at those answers?

Answer 8

From the given information in the problem and also from knowing the general formula of compound interest and what each variable represents

Answer 9

oh im still lost but its ok/

Answer 10

All you do is replace the variables with the appropriate numbers then compute A via calculator

Answer 11

For Jimmy, After substitution:

\[A = 2000(1+ \frac{.10}{12})^{12 \times 4}\]