Answer:the investor will make $185 more
Explanation:
The formula for compound interest is
A = P(1+r/n)^nt
A = total amount in the account at the end of t years.
Considering the bond that is being compounded annually,
The initial amount is $8000, so
P = 8000
It was compounded annually. This means that it was compounded once in a year. So
n = 1
The rate at which the principal was compounded is 6%. So
r = 6/100 = 0.06
It was compounded for 10 years. So
t = 10 years
Therefore
A = 8000 (1+0.06/1)^1×10
A = 8000(1.06)^10= $14327
Considering the bond that is being compounded quarterly,
P = 8000
It was compounded quarterly. This means that it was compounded 4 times in a year. So
n = 4
The rate at which the principal was compounded is 6%. So
r = 6/100 = 0.06
It was compounded for 10 years. So
t = 10 years
Therefore
A = 8000 (1+0.06/4)^4×10
A = 8000(1.015)^40= $14512
The difference between both investments is 14512 - 14327 = $185