With a principal investment of $19,200, which account will have the greatest value after 5 years? simple interest: I = P • r • t interest compounded annually is A = P (1 + r) t interest compounded quarterly: A = P (1 + ) 4t A. 3.6% with interest compounded annually B. 3.8% in a simple interest account C. 3.4% with interest compounded annually D. 3.2% with interest compounded quarterly

Question

Megan Saunders

Mathematics

24 November, 08:45

With a principal investment of $19,200, which account will have the greatest value after 5 years? simple interest: I = P • r • t interest compounded annually is A = P (1 + r) t interest compounded quarterly: A = P (1 + ) 4t A. 3.6% with interest compounded annually B. 3.8% in a simple interest account C. 3.4% with interest compounded annually D. 3.2% with interest compounded quarterly

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Davian · Answer 1

Given:

Principal: 19,200

term: 5 years

a) Interest compounded annually:

A = 19,200 (1 + 0.036) ^5

A = 19,200 (1.036) ^5

A = 19,200 (1.1934)

A = 22,913.28

b) Simple Interest

I = 19,200 * 0.038 * 5

I = 3,648.38

19,200 + 3,648.38 = 22,848.38

c) Interest compounded annually

A = 19,200 (1 + 0.034) ^5

A = 19,200 (1.034) ^5

A = 19,200 (1.182)

A = 22,694.40

d) Interest compounded quarterly

A = 19,200 (1 + 0.032/4) ^4*5

A = 19,200 (1 + 0.008) ^20

A = 19,200 (1.008) ^20

A = 19,200 (1.173)

A = 22,521.60