Question

Beau and Shaleah each get a $1000 bonus at work and decide to invest it. Beau putshis money into an account that earns an annual interest rate of 6.5%, compounded yearly. He also decided to deposit $1200 each year. Shaleah finds an account that earns 6.5%, compounded monthly,and decides to deposit $100 each month.

Compare the amounts of money that Beau and Shaleah deposit each year. Describe any differencesor similarities.

Compare the balances of Beau's and Shaleah's accounts over several years.

Describe any differences or similarities

Answer 1

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

this is the compound-interest formula:

"A" is the ending amount
"P" is the beginning amount (or "principal"),
"r" is the interest rate (expressed as a decimal)
"n" is the number of compoundings a year
"t" is the total number of years.

also
If interest is compounded yearly, then n = 1
if semi-annually, then n = 2
quarterly, then n = 4
monthly, then n = 12
weekly, then n = 52;
daily, then n = 365;