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. Show all work.

Question

Mathematics

Myers

12 October, 14:06

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. Show all work.

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Cynthia Hoffman · Answer 1

Larry wants to deposit $350 as a principle amount, with an interest of 4% compoundedquarterly.

=> 350 * 0.04 = 14 dollars per quarter.

=> 14 * 4 quarter per year = 56 dollars per year

=> 56 * 2 = 112 dollars for 2 years

Peggy wants to deposit $350 as the principle amount, with an interest of 6% compounded monthly.

=> 350 * 0.06 = 21 dollars per month

=> 21 dollars * 24 months = 504 dollars in 2 years.