Question

Larry and Peggy are making decisions about their bank accounts. Larry wants to deposit $350 as a principle amount, with an interest of 4% compounded quarterly. Peggy wants to deposit $350 as the principle amount, with an interest of 6% compounded monthly. Explain which method results in more money after 2 years. Show all work. @imqwerty

Answer 1

we use this formula to find the amount of money that we will get at the end-

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

okay
here A is the amount that we will be getting
P=the principle amount tat we deposited at the beginning
n=number of months for which the principle is compounded
r=rate of interest in decimals
t=time for which the money is deposited

so like lets find the amount that Larry will be getting-

P=350
t=2years
r=4%=0.04
it is quarterly compounded so 4months
therefore n=4

put all this in the equation we get this-

\(A=350(1+\large \frac{0.04}{4})^{4 \times 2}\)

Answer 2

Okay http://prntscr.com/af7tky

Answer 3

yes now you need to find the amount ffor peggy

Answer 4

what would n be

Answer 5

p=350
t=2 years
r=0.06

Answer 6

yes
and what bout n and t?

Answer 7

t is 2 years idk what n is

Answer 8

well since the amount is compounded monthly n is 12

Answer 9

a=395

Answer 10

yes correct

Answer 11

now you can compare them to get your answer

Answer 12

so peggy method results in more money .. 2 more questions!

Answer 13

yes :) yay :D