Joshua invested $750 in an account paying an interest rate of
3 1/4% compounded quarterly. Josiah invested $750 in an account paying an interest rate of 2 5/8 % compounded annually. After 18 years, how much more money would Joshua have in his account than Josiah, to the nearest dollar?

Question

19-01-2022
Mathematics

contestada

Joshua invested $750 in an account paying an interest rate of
3 1/4% compounded quarterly. Josiah invested $750 in an account paying an interest rate of 2 5/8 % compounded annually. After 18 years, how much more money would Joshua have in his account than Josiah, to the nearest dollar?

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LilxWaters LilxWaters · Answer 1 · 2022-01-19T20:44:21+01:00

Due to the difference in the interest rate and the quarterly compounding, Joshua will have $212.24 more than Josiah.
Step-by-step explanation:
Giving the following information:
Joshua:
Initial investment (PV)= $750
Interest rate (i)= 0.0341/4= 0.008525
Number of periods (n)= 18*4= 72 quarters
Josiah:
Initial investment (PV)= $750
Interest rate (i)= 0.0285
Number of periods (n)= 18 years
To calculate the future value of each one, we need to use the following formula:
FV= PV*(1 + i)^n
Joshua:
FV= 750*(1.008525^72)
FV= $1,381.98
Josiah:
FV= 750*(1.0285^18)
FV= $1,169.74
Due to the difference in the interest rate and the quarterly compounding, Joshua will have $212.24 more than Josiah.

Joshua invested $750 in an account paying an interest rate of 3 1/4% compounded quarterly. Josiah invested $750 in an account paying an interest rate of 2 5/8 % compounded annually. After 18 years, how much more money would Joshua have in his account than Josiah, to the nearest dollar?

Respuesta :

Otras preguntas

Joshua invested $750 in an account paying an interest rate of
3 1/4% compounded quarterly. Josiah invested $750 in an account paying an interest rate of 2 5/8 % compounded annually. After 18 years, how much more money would Joshua have in his account than Josiah, to the nearest dollar?