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Jose invested $$50,000 for 2 years at an annual interest rate of 4 percent compounded yearly. Patricia invested $50,000 for the same period of time, at the same interest rate, but the interest was compounded quarterly. To the nearest dollar, how much more money did Patricia's investment earn than that of Jose?
I think I get the idea, but I'm not sure what to do.
Patricia's investment: FV =$50,000 x 1.01^(2*4)
FV =$50,000 x 1.0828567056280801
Jose's investment: FV =$50,000 x 1.04^2
FV =$50,000 x 1.0816
FV = $54,080.00
The difference between Patricia's and Jose's investments =54,142.84 - $54,080.00 =$62.84.