SOLUTION: Frank wants to invest $4,000 into a savings account. He is trying to choose between two different accounts. Determine how much money Frank would have in 20 years using each of the

Algebra ->  Finance -> SOLUTION: Frank wants to invest $4,000 into a savings account. He is trying to choose between two different accounts. Determine how much money Frank would have in 20 years using each of the       Log On


   

Question 1146962: Frank wants to invest $4,000 into a savings account. He is trying to choose between two different accounts. Determine how much money Frank would have in 20 years using each of the following accounts. Then highlight which one would be the best.
A 4% interest rate, compounded annually.
A 2% interest rate, compounded quarterly.



Separate question
Found 2 solutions by ikleyn, richwmiller:
Answer by ikleyn(52781) About Me  (Show Source):
You can put this solution on YOUR website!
.

A 4% interest rate, compounded annually 

    Future value is  FV = 4000%2A%281%2B0.04%29%5E20 = 8764.49 dollars.


A 2% interest rate, compounded quarterly. 

    Future value is  FV = 4000%2A%281%2B0.02%2F4%29%5E%2820%2A4%29 = 5961.35  dollars.


Compare and make your decision.


Answer by richwmiller(17219) About Me  (Show Source):
You can put this solution on YOUR website!
I removed your separate question.
Submit one problem per post and limit yourself to 5 posts daily.