Question

Gabriel invested $77,000 in an account paying an interest rate of 3%

compounded monthly. Isabella invested $77,000 in an account paying an
interest rate of 4 % compounded quarterly. After 6 years, how much more
money would Isabella have in her account than Gabriel, to the nearest dollar?

Answer 1

Isabella earn
`5604.54` more money than Gabriel

Explanation:

As we know

Compound interest (CI)
`= P (1 + (r)/(n))^(nt)`

P is the principal amount

t is the time period

n is the number of time periods

r is the rate of interest

a) CI for Gabriel

`= 77000 (1 + (3)/(100*12))^(12*6)`
`= 92165.03` dollars

b) CI for Isabella

`= 77000 (1 + (4)/(100*4))^(4*6)`
`= 97769.57` dollars

Isabella earn
`5604.54` more money than Gabriel