Question

1. Over 3 years, how much more does $3000 in a savings account with an APR of 3.2% compounded

Answer 1

Answer:

$1080

Step-by-step explanation:

$((3000 \times 0.032) \times 2) \times 3 = 576$

convert % to decimal by multiplying 3.2%x100=0.032

then multiply by initial amount 3000x0.032

then multiply by 2 because it's compounding semiannual

then multiply by 3 because it's over a 3 yr period

do the same for the quarterly compound but multiply by 4 because it's quarterly

$((3000 \times 0.03) \times 2) \times3 = 1080$

over a 3 yr period the quarterly compounded amount will earn:

$1080 - 576 = 504$

$504 more than the account compounded semiannual