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Joanie takes a $6,000 loan to pay for her car. The annual interest rate on the loan is 12%. She makes no payments for 4 years, but has to pay back all the money she owes at the end of 4 years. How much more money will she owe if the interest compounds quarterly than if the interest compounds annually? Express your answer as a dollar value to the nearest cent.

 Aug 4, 2020
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Amount she owes   compounded quarterly    6000 ( 1 + .12/4)(4*4)  =..........

Amount she owes   compounded annually     6000(1+.12)4 = .........    

 

 I'll let you figure out the DIFFERENCE......

 Aug 4, 2020

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