Ask Question
16 October, 01:08

Skylar plans to use $3400 to open a savings account with an annual interest rate of 1.15%. How much more interest will he earn over 13 years if he chooses a compound interest account that compounds interest quarterly instead annually? Round your answer to the nearest cent.

interest compounded annually: A = P (1 + r) t

interest compounded quarterly: A = P (1 + fraction numerator r over denominator 4 end fraction) 4t

$

+2
Answers (1)
  1. 16 October, 01:21
    0
    Substitute the given values into the given equations, then evaluate the difference between the results.

    Compounded annually, Skylar's balance after 13 years is

    A = 3400 (1 +.0115) ^13 = 3944.90

    Compounded quarterly, Skylar's balance after 13 years is

    A = 3400 (1 +.0115/4) ^52 ≈ 3947.42

    Using the account where interest is compounded quarterly, Skylar earns additional interest of

    $3947.42 - 3944.90 = $2.52
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Skylar plans to use $3400 to open a savings account with an annual interest rate of 1.15%. How much more interest will he earn over 13 ...” in 📗 Mathematics if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers