Question

Two brothers, Charles and Brian,each inherit $30000. Charles invests his inheritance ina a savings account with an annual return of 2.5 %, while Brian invest his inheritance ina CD paying 6.2% annually. How much more money than Charles does Brian have after 1 year?

Answer 1

$1,110

Explanation:

You have to use the interest formula to calculate how much each brother will have after a year.

A = P(1+r)^t

A = future/ending value

P = principle

R = interest rate

T = time (given in years)

Charles = 30,000(1+.025)^1 = 30,750

Brian = 30,000(1+.062)^1 =31,860

31,860-30,750=1,110

Brian will have $1,110 more than Charles after 1 year