Question

Two brothers, Steven and John, each inherit $32000. Steven invests his inheritance in a savings account with an annual return of 2.1%, while John invests his inheritance in a CD paying 4.3% annually. How much more money than Steven does John have after 1 year?

Answer 1

After investing their inheritances at different interest rates for one year, John has $704 more than Steven.

Step-by-step explanation:

To calculate how much more money John has after 1 year compared to Steven, we must first calculate the amount of money each brother will have after investing their inherited $32,000 at their respective interest rates.

Steven invests at a 2.1% annual return. After 1 year, his investment will grow to:

Steven's investment = $32,000 * (1 + 0.021) = $32,672.

John invests in a CD at a 4.3% annual return. After 1 year, his investment will be:

John's investment = $32,000 * (1 + 0.043) = $33,376.

Now we subtract Steven's total from John's to find out how much more John has:

Difference = John's investment - Steven's investment = $33,376 - $32,672 = $704.

Therefore, after 1 year, John has $704 more than Steven.

Answer 2

John owns 704 more dolalrs than Steve after 1 year.

Step-by-step explanation:

we will compare the yields of each brother:

Steven investment:

`Principal \: (1+ r)^(time) = Amount`

Principal 32,000

time 1

rate 0.021

`32000 \: (1+ 0.021)^(1) = Amount`

Amount 32672

John investment:

rate 0.043

`32000 \: (1+ 0.043)^(1) = Amount`

Amount 33376

Difference: 33.376 - 32,672 = 704