Question

Nick invests $3,500 in an account earning 11% interest compounded annually. Krista invests $4,000 in an account earning 4% interest compounded annually. Who will have more money in their account after 2 years? How much more?

Answer 1

Answer:

Krista's have more amount by $14.05

Step-by-step explanation:

Nick's Case

Principal = $3500

Rate of interest = 11% = 0.11

Time = 2 years

Formula : $A=P(1+R)^t$

$A=3500(1+0.11)^2$

$A=4312.35$

Krista's case

Principal = $4000

Rate of interest = 4% = 0.04

Time = 2 years

Formula : $A=P(1+R)^t$

$A=4000(1+0.04)^2$

$A=4326.4$

Nick's amount = $4312.35

Krista's amount = $4326.4

So, Krista's have more amount

Difference =  $4326.4-$4312.35=$14.05

Hence Krista's have more amount by $14.05

Answer 2

Krista will have more money in 2 years time than Nick and she will get $14.05 more than Nick. Hope this helps.