\(\text{Diana can either invest $20,\!000$ dollars for $4$ years with a simple interest rate of $6\%$ or an interest rate of $7\%$ which compounds quarterly. How many more dollars, rounded to the nearest dollar, would she get with the better interest rate than with the worse one? }\)

Guest Aug 12, 2019

#1**0 **

Simple interest 20,000 x .06 x 4 = $ 4800 total after 4 yrs 20000 + 4800 = 24800

Componded interest:

quarterly interest 7% / 4 = .0175 for 16 quarters

20 000 (1+.0175)^16 = 26 398.59

26398.59 - 24800 = ~~ $ 1599 more interest with 7% plan

ElectricPavlov Aug 12, 2019