Question

Jessica's friend Tyshaun found an account that earns 2.5 percent interest compounded annually. Tyshaun made an initial deposit of $100 into this account at the same time Jessica made a deposit of $100 into her account. After 10 years, how much more money will Tyshaun's initial deposit have earned than Jessica's initial deposit?

Answer 1

Tyshaun's initial deposit have earned $28.01 more money than Jessica's initial deposit

Explanation:

As given, Jessica's initial deposit = $100

Tyshaun initial deposit = $ 100

As given, Tyshaun account earns 2.5 percent interest compounded annually.

rate = 2.5% = 0.025

so, after t= 10 years

Payment = P
`(1+r)^(t)` = 100
`(1+0.025)^(10)` = 100
`(1.025)^(10)` = 128.01

So ,

Interest = Money earned by Tayshaun - Jessica's initial deposit

= 128.01 - 100

= 28.01

∴ we get

Tyshaun's initial deposit have earned $28.01 more money than Jessica's initial deposit