SOLUTION: Over 2 years, how much more does $2000 in a savings account with an APR of 5.2% compounded quarterly earn in interest than the same amount in a savings account with an APR of 4.8%
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Question 942541: Over 2 years, how much more does $2000 in a savings account with an APR of 5.2% compounded quarterly earn in interest than the same amount in a savings account with an APR of 4.8% compounded monthly? Answer by TimothyLamb(4379) (Show Source):
You can put this solution on YOUR website! compound-interest formula:
v = p( 1 + (r/n) )^(nt)
where:
v = final value
p = initial (principal) value
r = interest rate (as a decimal)
n = number of compounding periods per year
t = number of years
---
interest from 5.2%:
v = 2000*( 1 + (0.052/4) )^(4*2)
v = 2217.71
i = 2217.71 - 2000
i = 217.71
---
interest from 4.8%:
v = 2000*( 1 + (0.048/12) )^(12*2)
v = 2201.10
i = 2201.10 - 2000
i = 201.10
---
answer:
d = 217.71 - 201.10
d = 16.61
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