A) $53687.10
B) $68899.81
C) Yes
Explanation
A) George's money will follow the formula
,
where p is the principal invested, r is the interest rate as a decimal number, n is the number of times per year the money is compounded, and t is the number of years.
This gives us
Jim's money follows the formula
A=p + prt, where p is the principal invested, r is the interest rate as a decimal number, and t is the number of years.
This gives us
A=20000+20000(0.0675)(5) = 26750
This gives us a total pooled of 26750+26937.10 = 53687.10
B) The pooled money will follow the formula
,
where p is the principal invested, r is the interest rate as a decimal, n is the number of times per year the interest is compounded, and t is the number of years.
This gives us
C) Since each man inherits 20000, this gives us a total of 40000. Using the compound interest formula above, we have
This is more money than the two separate accounts being pooled, so yes, they should have done this.