+0  
 
0
186
1
avatar

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

 Aug 12, 2019
 #1
avatar+22062 
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

 Aug 12, 2019

34 Online Users

avatar
avatar
avatar
avatar
avatar
avatar