Answer:
$759.46
Explanation:
You want the difference in the value of $7000 accounts earning 9% interest for 12 years if one is compounded annually, and the other is compounded 6 times per year.
Compound interest
The formula for the value A of an investment P earning interest at rate r per year compounded n times per year for t years is ...
A = P(1 +r/n)^(nt)
You want the difference in the amounts when n = 6 and n = 1.
A = 7000(1 +.09/6)^(6·12) ≈ 20448.11
A = 7000(1 +.09/1)^(1·12) ≈ 19688.65
The difference is ...
20448.11 -19688.65 = 759.46
The investment compounded periodically will be worth $759.46 more after 12 years.
<95141404393>