Question

kale and merricat are making decisions about their bank accounts. kale wants to deposit $200 as a principle amount, with an interest of 2% compounded quarterly. mericat wants to deposit $200 as the principle amount, with an interest of 4% compounded monthly.

Answer 1

@ganeshie8 Please help me!

Answer 2

what do you have so far?

Answer 3

Nothing :( Well, I have a formula?

Answer 4

which formula do you have

Answer 5

a=p(1+r/n)^nt

Answer 6

I could be wrong

Answer 7

good

Answer 8

that formula will be used here

Answer 9

Yay:)

Answer 10

`Harrison wants to deposit $200 as a principle amount, with an interest of 2% compounded quarterly`

P = 200 is the principal
r = 0.02 is the interest rate in decimal form (2% = 2/100 = 0.02)
n = 4 is the number of times you compound the money per year (quarterly = 4 times)
t = 2 years

Answer 11

ok so then we would just plug it in right? n=200(1+0.02/4)^(2)(4)
right?

Answer 12

yep

Answer 13

then compute it with a calculator

Answer 14

I got 204.0401

Answer 15

I'm getting something slightly higher

Answer 16

Really? Maybe I typed it in wrong

Answer 17

oh okay I got 408.0602! Sorry :)

Answer 18

did you type in `200*(1+0.02/4)^(4*2)` ?

Answer 19

yes

Answer 20

I got 208.141409 when I did that

Answer 21

I got that too

Answer 22

208.141409 rounds to 208.14

Answer 23

Ok :) What do we do next?

Answer 24

now we move onto the next part

`Sherrie wants to deposit $200 as the principle amount, with an interest of 4% compounded monthly.`
what are P, r, n and t?

Answer 25

p=200
r=0.04
t=12? bcuz 12 months in a year

Answer 26

yep

Answer 27

oh wait, no n = 12 and t = 2

since the time frame is 2 years

Answer 28

oh sorry :)

Answer 29

I forgot to post that `Explain which method results in more money after 2 years.`
so each person has their money in for t = 2 years

Answer 30

Hahaha it's fine:) I get it now

Answer 31

do we plug those value in the same formula?

Answer 32

yes you'll plug in P = 200, r = 0.04, n = 12 and t = 2

Answer 33

K hold on please

Answer 34

216.63?

Answer 35

I'm getting the same thing

Answer 36

So the answer would be Sherrie?

Answer 37

Harrison will have 208.14
Sherrie will have 216.63

Answer 38

yep she has more money

Answer 39

Thank-you so much!!!!

Answer 40

no problem