Javier invests $500 into an account with the bank that compounds continuously with an annual rate of 9.0% and Maria

Question

Javier invests $500 into an account

with the bank that compounds continuously with an annual rate of 9.0% and

Maria invests $500 into a different account that compounds annually with an

annual rate of 9.03%. Find the value in

each account after 10 and 30 years. What

did you notice? Should you compare more

than just the annual rate to determine

which account to invest in? Why or why

not?

in progress 0
Claire 4 weeks 2021-09-19T21:26:53+00:00 1 Answer 0

Answers ( )

    0
    2021-09-19T21:27:59+00:00

    Answer:

    Amount in Javier’s Account is $1183.68(after 10 years) and $6633.84(after 30 years)

    Amount in Maria’s Account is $1186.94 (after 10 years) and $6688.83(after 30 years)

    The Interest Rate is Not Sufficient.

    Step-by-step explanation:

    At Compound Interest

    Amount= P(1+r)ⁿ

    where:

    P=Principal,

    R= Rate,

    n= number of years

    Javier’s Principal=$500

    Javier’s Annual Rate =9%=0.09

    I. After 10 years

    Amount= P(1+r)ⁿ

    = 500(1+0.09)¹⁰=500(1.09)¹⁰ =$1183.68

    II. After 30 years

    Amount= 500(1+0.09)³⁰=500(1.09)³⁰ =$6633.84

    Maria’s Principal=$500

    Maria’s Annual Rate=9.03%=0.0903

    I. After 10 years

    Amount= P(1+r)ⁿ

    = 500(1+0.0903)¹⁰=500(1.0903)¹⁰ =$1186.94

    II. After 30 years

    Amount= 500(1+0.0903)³⁰ =500(1.0903)³⁰ =$6688.83

    The Annual Rate and Time is sufficient enough to help determine which account to invest in. The longer the duration, the more the Amount of money in the Account.

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