Question

Ashley invested $59,000 in an account paying an interest rate of 3 (1/8)% compounded

daily. Fwam invested $59,000 in an account paying an interest rate of 2 (3/4)%
compounded annually. After 15 years, how much more money would Ashley have in
her account than Fwam, to the nearest dollar?

Answer 1

5650

Explanation:

3 (1/8)% =3.125% but compound daily = 3.125% /365 = 0.00856%

so everyday the money grows at 1.00856%, so compound 365 times, it'll become 1.00856%^365 =3.1742% annually equivalent.

so now you can compare the 2 - apples to apples.

so 3.1742%^15years * 59000 = $94,279.80

2.75%^15years * 59000 = $ $88,629.74

diff is 5650$