Compare the following accounts. Which account will earn more money in interest? Account 1 earns 1.2 percent, compounded yearly. Account 2 earns 1 percent, compounded yearly. Account 3 earns 1.2 percent, compounded monthly. Account 4 earns. 5 percent, compounded monthly.

Question

Sariah Foster

Business

19 February, 12:20

Compare the following accounts. Which account will earn more money in interest? Account 1 earns 1.2 percent, compounded yearly. Account 2 earns 1 percent, compounded yearly. Account 3 earns 1.2 percent, compounded monthly. Account 4 earns. 5 percent, compounded monthly.

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Answers (1)

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Jackrabbit · Answer 1

Hello!

The answer is: Account 3 earns 1.2 percent, compounded monthly.

Why?

We are talking about how many money will be earned in interested, which means that the higher percentage in a shorter period of time will earn a higher amount of money.

So, let's check the given options:

Account 1: Earns 1,2 percent compounded yearly, it means just 0,1 percent each month.

Account 2: Earns 1 percent compounded yearly, it means 0,08 percent each month.

Account 3: Earns 1,2 percent compounded monthly and it means 14,4 percent each year.

Account 4: Earns 0,5 percent compounded monthly, which means 6 percent per year.

So, the account 3 will earn more money in interest.

Have a nice day!