+0  
 
0
59
1
avatar

Diana can either invest 20000 dollars for 4 years with a simple interest rate of 6% or an interest rate of 10% which compounds quarterly. How many more dollars, rounded to the nearest dollar, would she get with the better interest rate than with the worse one?

 Nov 17, 2020
 #1
avatar+114221 
+1

Simple interest  amount after 4 years at 6% =  20000  +  20000 (.06) (4)   = $24800

 

Compound interst amount  after 4 years compounded quarterly at 10%  = 20000 (1 +.10/4) ^(4 * 4)  ≈  $29690 

 

 

[ 29690  - 24800 ]  = $4890

 

 

cool cool cool

 Nov 17, 2020

24 Online Users

avatar
avatar