Need algebra help: Larry and Peggy are making decisions about their bank accounts.

Anonymous
timer Asked: Nov 25th, 2015
account_balance_wallet $5

Question Description

Larry and Peggy are making decisions about their bank accounts. Larry wants to deposit $350 as a principle amount, with an interest of 4% compounded quarterly. Peggy wants to deposit $350 as the principle amount, with an interest of 6% compounded monthly. Explain which method results in more money after 2 years. PLEASE SHOW ALL WORK! 

Tutor Answer

Athul K
School: UT Austin

hello


compound interest formula,

A= P(1+(r/n))^(nt)

where A = Final amount

          P = principal

          r = annual rate of interest ( as a decimal)

         n = number of times interest compounded per year

         t = time in years


larrys final amount

    A =  P(1+(r/n))^(nt)

       =  350 ( 1+( 0.04/ 4)) ^(4*2)

       = 350( 1.01)^(8)

      =  $ 379 


peggys final amount

    A = P(1+(r/n))^(nt)

       =  350 ( 1+( 0.06/12) ^(12*2)

       = 350( 1.005)^(24)

      =  $ 394.51 



so peggy's final amount is greater than larry's final amount

PEGGY'S METHOD RESULT IN MORE MONEY



hope you understood..please message if you have any doubts...thank you

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Review

Anonymous
Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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