Answer:
$53.83
Step-by-step explanation:
For David
David invested $340 in an account paying an interest rate of 2\tfrac{1}{8}2 8 1 % compounded continuously.
r = 2 1/8% = 17/8% = 2.125% = 0.02125
t = 17 years
P = $340
For Compounded continuously, the formula =
A = Pe^rt
A = Amount Invested after time t
P = Principal
r = interest rate
t = time
A = $340 × e^0.02125 × 17
A = $ 487.94
For Natalie
Natalie invested $340 in an account paying an interest rate of 2\tfrac{3}{4}2 4 3 % compounded quarterly.
r = 2 3/4 % = 11/4% = 2.75% = 0.0275
t = 17 years
P = $340
n = compounded quarterly = 4 times
Hence,
Compound Interest formula =
A = P(1 + r/n)^nt
A = Amount Invested after time t
P = Principal
r = interest rate
n = compounding frequency
t = time
A = $340 (1 + 0.0275/4) ^17 × 4
A = $ 541.77
After 17 years, how much more money would Natalie have in her account than David, to the nearest dollar?
This is calculated as
$541.77 - $ 487.94
= $53.83
Hence, Natalie would have in her account, $53.83 than David
