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PLZZZ HELP!!!!!!!!!!!!!!!!!!!!!!
Harrison and Sherrie are making decisions about their bank accounts. Harrison wants to deposit $200 as a principal amount, with an interest of 2% compounded quarterly. Sherrie wants to deposit $200 as the principal amount, with an interest of 4% compounded monthly. Explain which method results in more money after 2 years. Show all work.

Respuesta :

mhanifa

Answer:

Harrison

  • Principal P = 200
  • Interest rate r = 2% = 0.02
  • Number of compounds n = 4
  • Time t = 2

Total amount:

  • [tex]A = P(1+r/n)^{nt}=200*(1+0.02/4)^{4*2} = 208.14[/tex]

Sherrie

  • Principal P = 200
  • Interest rate r = 4% = 0.04
  • Number of compounds n = 12
  • Time t = 2

Total amount:

  • [tex]A = P(1+r/n)^{nt}=200*(1+0.04/12)^{12*2} = 216.63[/tex]

As we see the second method is a better choice

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