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27. Reason Adam invests $8,000 in an account that
earns 1.25% interest, compounded quarterly
for 20 years. On the same date, Jacinta invests
$8,000 in an account that earns continuous
compounded interest at a rate of 1.25% for
20 years. Who do you predict will have more
money in their account after 20 years? Explain
your reasoning.

Respuesta :

mhanifa

Answer:

Jacinta will have more money

Step-by-step explanation:

  • For the same amount of investment and interest rate, compound interest is greater with greater number of compounds.
  • Continuous compound is closer to daily compound which makes more compounds and returns than quarterly compound.

The interest amount is provided below for quarterly and daily compound:

  • 2,268.20
  • 2,307.89

Jacinta will have more money

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