+0  
 
-1
42
1
avatar+508 

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?

Lightning  Aug 5, 2018
 #1
avatar
0

$50,000 x 1.04^2 =

$50,000 x 1.0816  = $54,080 - Jose's investment after 2 years.

 

$50,000 x (1 + .04/4]^(2*4) = 

$50,000 x       1.01^8               =

$50,000 x        1.0828567056280801 =$54,143 - Patricia's investment after 2 years.

 

$54,143  -  $54,080 =$63 - extra interest that Patricia earned on her investment.

Guest Aug 5, 2018

10 Online Users

avatar

New Privacy Policy

We use cookies to personalise content and advertisements and to analyse access to our website. Furthermore, our partners for online advertising receive information about your use of our website.
For more information: our cookie policy and privacy policy.