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Jose invested $$50,000 for 2 years at an annual interest rate of 4 percent compounded yearly. Patricia invested $50,000 for the same period of time, at the same interest rate, but the interest was compounded quarterly. To the nearest dollar, how much more money did Patricia's investment earn than that of Jose? 

I think I get the idea, but I'm not sure what to do.

 Feb 24, 2020
edited by Guest  Feb 24, 2020

Best Answer 

 #3
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Patricia's investment: FV =$50,000 x 1.01^(2*4)

                                        FV =$50,000 x  1.0828567056280801

                                        FV =$54,142.84

 

 

 

Jose's investment:   FV =$50,000 x 1.04^2

                                    FV =$50,000  x  1.0816

                                    FV = $54,080.00

 

The difference between Patricia's and Jose's investments =54,142.84  -  $54,080.00 =$62.84.

 Feb 24, 2020

3+0 Answers

 #3
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Best Answer

Patricia's investment: FV =$50,000 x 1.01^(2*4)

                                        FV =$50,000 x  1.0828567056280801

                                        FV =$54,142.84

 

 

 

Jose's investment:   FV =$50,000 x 1.04^2

                                    FV =$50,000  x  1.0816

                                    FV = $54,080.00

 

The difference between Patricia's and Jose's investments =54,142.84  -  $54,080.00 =$62.84.

Guest Feb 24, 2020
 #4
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thats right

 Feb 24, 2020
 #5
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Is that your way of saying thank you to the guest that answered your question ?

Melody  Feb 25, 2020

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