Harrison and Sherrie are making decisions on their bank accounts. Harrison 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. Explain which method will result in more money.

Question

anonymous · Answer

Because there are no quantities given for either interest rates or the amounts of money you will need to work this with something like a table. Make a few examples of tables with different values for money and interest rates and see which works the best. Make sure to make some values the same so that when you compare the tables you are able to understand the effects of the different values...

anonymous · Answer

I don't know how to do that either..

anonymous · Answer

If either is possible, why not do both? That's the best return. 

For the problem as stated, the higher interest rate will eventually win. You may have to wait a long time for $100 at 1.001%/year to catch up with $100,000,000 at 1.000%/year. In this case, it's around 1.4 million years, so you do in fact need to know the interest rates and the ratio of the two principal investment amounts to know which will be better within a reasonable time....!!

anonymous · Answer

i am so confused now..

anonymous · Answer

now i am getting with you. what's the problem? :)