Answer:
Barney will save about $119.66.
Step-by-step explanation:
The compound interest formula is:
A=[tex]p(1+\frac{r}{n})^{nt}[/tex]
Case 1:
when p = 780
r = 0.313
n = 12
t = 1
Putting the values in formula:
[tex]780(1+\frac{0.313}{12})^{12}[/tex]
A = [tex]1.36204\times780=1062.39[/tex]dollars
Interest accured = [tex]1062.39-780=282.39[/tex] dollars
Case 2:
when p = 780
r = 0.191
n = 12
t = 1
Putting the values in formula:
[tex]780(1+\frac{0.191}{12})^{12}[/tex]
A = [tex]1.20863\times780=942.73[/tex]dollars
Interest accured = [tex]942.73-780=162.73[/tex] dollars
Now difference in interest in both cases = [tex]282.39-162.73=119.66[/tex] dollars
Hence, Barney will save about $119.66.