Answer:
<em>To the nearest dollar, Logan would have $1 in his account more than Ruby</em>
Step-by-step explanation:
<u>Compound Interest</u>
It occurs when the interest is reinvested rather than paying it out.
Interest in the next period is then earned on the principal sum plus previously accumulated interest.
The formula is:
Where:
A = final amount
P = initial principal balance
r = interest rate
n = number of times interest applied per time period
t = number of time periods elapsed
Ruby invested P=$850 at r=2%=0.02 compounded quarterly. There are 4 quarts in a year, thus n=4. The investment lasted for t=17 years.
The final amount Ruby has is:
A=850*1.40376
A=$1,193.19
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Logan invested P=$850 at r=2%=0.02 compounded monthly. There are 12 months in a year, thus n=12. The investment lasted for t=17 years.
The final amount Logan has is:
A=850*1,40455
A=$1,193.87
The difference is $0.67.
To the nearest dollar, Logan would have $1 in his account more than Ruby