Question

☻WILL GIVE MEDAL AND FAN ☻

Harrison and Sherrie are making decisions about their bank accounts.

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

Sherrie wants to deposit $200 as the principle amount, with an interest of 4% compounded monthly.

Explain which method results in more money after 2 years. Show all work.

Answer 1

interest rate?

Answer 2

I am that good at these kinds of math honestly, but I love to try them out!

Harrison
Principal (starting $) : \(\large $200\)
Quarterly (every 4 months, I believe): \(\large 12 \div 4 = 3\)
Interest per 3 months : \(0.02 \times 3\)
\(\large $200 + (0.02 \times 3)\)

Sherrie
Principal (starting $) : \(\large $200\)
Quarterly (every moths): \(\large 12 \)
Interest per 3 months : \(0.04 \times 12\)
\(\large $200 + (0.04 \times 12)\)

Answer 3

*I am NOT that good

Answer 4

Lol, I just multiplied the percent over and over again

Answer 5

Harrison:
200 * 0.02 + 200 = 204
204 * 0.02 + 204 = 208.08
208.08 * 0.02 + 208.08 = 212.24
212.24 * 0.02 + 212.24 = 216.49
216.49 * 0.02 + 216.49 = 220.82
220.82 * 0.02 + 220.82 = 225.24
225.24 * 0.02 + 225.24 = 229.75
229.75 * 0.02 + 229.75 = 234.35
*** 234.35 ***

Sherrie:
200 * 0.04 + 200 = 208
208 * 0.04 + 208 = 216.32
216.32 * 0.04 + 216.32 = 224.97
224.97 * 0.04 + 224.97 = 233.97
233.97 * 0.04 + 233.97 = 243.33
*** Sherrie would earn more in 5 months than Harrison would in 2 years ***

Answer 6

Guess there's an easier way. Thanks for your help anyways!

Answer 7

No problem :)