Question

Harry and Sherrie are making decisions on their bank accounts. Harry wants to put more money in as a principle amount because the more you start with the more interest you will gain. Sherrie wants to put the original money in an account with a higher interest rate. Which method will result in more money?

Can someone please help walk me through this question?

Answer 1

@Hero

Answer 2

any idea how to solve this @agent0smith

Answer 3

Yes, but I kinda need to know what you know first... hopefully you know the formula you'd use to work out interest.

Which do you think would eventually result in more money?

Answer 4

would it be the At=P(1+r) formula? and I think Harry's way is correct @agent0smith

Answer 5

Actually it'll help to think of it as just exponential growth... which will grow faster eventually, a bigger starting population, or a faster percentage growth rate?

Answer 6

a faster percentage I think? @agent0smith

Answer 7

Correct.

Answer 8

so tell me if this is a good response please....

Answer 9

Yep, eventually, a higher interest rate will grow faster. Initially, Harry's would be faster.

Answer 10

thank you !

Answer 11

What...?

Answer 12

Correct. But the question isn't specific... eventually Sherry will. Initially, harry will earn more interest.

Answer 13

Re-read what I just said :P

Answer 14

Yes, since that's what 'initially' meant

Answer 15

Short term, Harry. Long term, Sherry.

Answer 16

ok thanks.