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

 Algebra Tutor: None Selected Time limit: 1 Day

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!

Nov 25th, 2015

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
Nov 25th, 2015

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Nov 25th, 2015
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Nov 25th, 2015
Dec 6th, 2016
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