Question

PLEASE HELP ASAP WILL MEDAL BRAINLIEST

Amelia plans to open a compound interest savings account with a $22,000 deposit at a bank with an annual interest rate of 5.25%. How much more interest will she earn over 10 years if she chooses an account that compounds interest quarterly instead of annually? interest compounded annually: A = P (1 + r)t interest compounded quarterly: A = P (1 + )4t

Answer 1

Given
Present investment, P = 22000
APR, r = 0.0525
compounding time = 10 years
Future amount, A 

A. compounded annually
n=10*1=10
i=r=0.0525
A=P(1+i)^n
=22000(1+0.0525)^10
=36698.11

B. compounded quarterly
n=10*4=40
i=r/4=0.0525/4
A=P(1+i)^n
=22000*(1+0.0525/4)^40
=37063.29


Therefore, by compounding quarterly, she will get, at the end of 10 years investment, an additional amount of
37063.29-36698.11
=$365.18