Answer:
To compare the amount of money that Patrick and Brooklyn would have after 2 years, we need to calculate the interest earned using each of their methods.
For Patrick, who deposited $300 with an interest rate of 3% compounded quarterly, the formula to calculate the amount after 2 years (8 quarters) is:
A = P(1 + r/n)^(nt)
Where:
P = principal amount ($300)
r = interest rate (3%)
n = number of times compounded per year (4)
t = time in years (2)
Substituting the values into the formula:
A = $300(1 + 0.03/4)^(4 * 2)
A = $300(1.0075)^8
A = $300 * 1.06173
A = $318.52
For Brooklyn, who deposited $300 with an interest rate of 5% compounded monthly, the formula to calculate the amount after 2 years (24 months) is:
A = P(1 + r/n)^(nt)
Where:
P = principal amount ($300)
r = interest rate (5%)
n = number of times compounded per year (12)
t = time in years (2)
Substituting the values into the formula:
A = $300(1 + 0.05/12)^(12 * 2)
A = $300(1.00417)^24
A = $300 * 1.09722
A = $328.17
Therefore, after 2 years, Brooklyn would have $328.17, which is more money than Patrick's $318.52.