Westonci.ca offers fast, accurate answers to your questions. Join our community and get the insights you need now. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform.
Sagot :
Given:
Account 1:
Principal, P = $2000
Time, t = 4 years
Rate, r = 3% = 0.03
number of times compounded, n = monthly = 12 months/year
Account 2:
Principal, P = $2200
Time, t = 2 years
Rate, r = 5% = 0.05
number of times compounded, n = daily = 365 days/year
Let's determine the account which will earn more interest.
Apply the compound interest formula:
[tex]I=(P(1+\frac{r}{n})^{nt})-P[/tex]Where:
P is the Principal
r is the interest rate
n is the number of times the ineterest is compounded per unit time'
t is the time in years
Now, let's find the interest earned in each account.
• ACCOUNT 1:
[tex]\begin{gathered} I=(2000(1+\frac{0.03}{12})^{12\times4})-2000 \\ \\ I=(2000(1+0.0025)^{48})-2000 \\ \\ I=(2000(1.0025)^{48})-2000 \\ \\ I=2254.66-2000 \\ \\ I=254.66 \end{gathered}[/tex]
The interest earned in account 1 is $254.66
• ACCOUNT 2:
[tex]\begin{gathered} I=(2200(1+\frac{0.05}{365})^{730})-2200 \\ \\ I=(2200(1+0.00013698)^{730})-2200 \\ \\ I=2431.36-2200 \\ \\ I=231.36 \end{gathered}[/tex]
The interest earned in account 2 is $231.36
We can see the interest earned in account 1 is greater than the interest earned in account 2.
To find the difference, we have:
$254.66 - $231.36 = $23.30
Therefore, Account 1 earns $23.30 more than Account 2.
ANSWER:
Account 1 earns $23.30 more than Account 2.
Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Get the answers you need at Westonci.ca. Stay informed with our latest expert advice.
