Question

i will give all star to whoever  and fan Logan plans to use $1200 to open a savings account with an annual interest rate of 1.25%. How much more interest will he earn over 5 years if he chooses a compound interest account that compounds interest quarterly instead of a simple interest account? Round your answer to the nearest cent. anyone who noes how to deal with finance and money?

Answer 1

Given:
Principal : 1200
interest rate: 1.25%
term : 5 years

Simple Interest = 1,200 * 1.25% * 5
S.I = 75
1,200 + 75 = 1,275

Interest compounded quarterly:
A = P (1 + r/4)^4t
A = 1,200 (1 + 0.0125/4)⁴ˣ⁵
A = 1,200 (1.003125)²⁰
A = 1,200 (1.064)
A = 1,276.80