Question

Town Bank offers a 2.25%
interest rate, while Charter One
Offers 2.8%. Both banks compound
interest annually. If Rob wants to
set up a new account with $5,000,
how much more money will he
earn at Charter One over Town
Bank after 25 years?

Answer 1

Answer:

Town Bank

100 + 2.25 = 102.25

102.25/100 = 1.0225

5000 X 1.0225^25 = 8720.73

Charter One

100 + 2.8 = 102.8

102.8/100 = 1.028

5000 X 1.028^25 = 9972.36

9972.36 - 8720.73 = 1251.63

difference = $1251.63