Question

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

@pinkcandyrosez882

Answer 2

Sherrie

Answer 3

Sorry idk

Answer 4

2% compounded quarterly is .5% each quarter (2% ÷ 4)
So the principal (200) is multiplied by 1.005 ⁸ (8 because there are 8 quarters in 2 years)

200 x 1.005 ⁸ = $208.14 in 2 years (rounded to the nearest penny)

4% over 12 months is 1/3% every month or .003333
200 x 1.00333²⁴ (24th power since there are 24 months in 2 years) $216.61 in 2 years rounded to the nearest penny.
The monthly scenario is better.

Answer 5

thank you