Question

Need Help pretty fast.

Harrison and Sherrie are making decisions about their bank accounts. Harrison wants to Put more money as a principle amount, because the more interest you will gain. Sherrie wants to Put the original money in an account with a higher interest rate. Explain which method results in more money after 2 years. Show all work.

Answer 1

Let us say that the amount needed to open an account is uniformly 10,000 in both methods and increases 10% annually and increases 1% per 1000. Original amount = 10, 000 ~ 10%
1. Harrison
10% ~ increases 1% per 1000
Money = 11, 000
Total Interest = 11%

After 2 years = 11,000 x 0.22 = 2420 + 11,000 = 13, 420


2. Sherrie
10, 000 ~ 11%
Money = 10, 000
Total Interest = 11%

After 2 years = 10, 000 x 0.22 = 2200 + 10, 000 = 12, 200

Hope this is right. What matters is the values the original values and the change in values, it really will depend on the numbers given.