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Diana can either invest 20000 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?

 Sep 24, 2020
 #1
avatar+118 
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PLease help!

 Sep 24, 2020
 #2
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6%     money to be made       2000 (.06)(4) = 480 dollars

 

 

7%                                           2000(1 + .07/4)16 - 2000 = 639.86 dollars

                                                       interst rate per PERIOD = .07/4     periods = quarterly for 4 years = 16

 Sep 24, 2020
 #3
avatar+118 
0

So its16?

 Sep 24, 2020

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