Answer:
$16.61
Solution:
Let's suppose we have two types of savings account, both containing a deposit of $2000.
- Account A with 5.2 % quarterly interest rate
- Account B with 4.8% monthly interest rate
Now, we have to calculate the earning of both accounts
The formula used to calculate the earning will be
v = p( 1 + (r/n) )^(nt)
Here, v= final earning
r= interest rate (in decimal form)
p=initial principal value
t = total number of year
n = compounding periods of years
- So, Let's put the values for Account A
5.2 percent in decimal form = 5.2/100= 0.052
v = 2000 x ( 1 + (0.052/4) )^(4*2)
=2217.71
So the total earning of account A will be $ 2217.71
- Now, Let's put the values for Account B
4.8 percent in decimal form = 4.8/100= 0.048
v= 2000*( 1 + (0.048/12) )^(12*2)
= 2201.10
So the total earning of account A will be $ 2201.10
Now, to find how much account A earned more than account B, we will subtract the earning of B from A.
2217.71-2201.10=$16.61
So account A, earned $16.61 more than account B.
Hope it helps! :)
