Answer:
Marion’s account will have $237 more at the end of 10 years
Explanation:
Firstly, we calculate the amount that will be in Marion’s account after 10 years.
To calculate this, we use the formula for simple interest
I = PRT/100
where I is the interest accrued for the period of years
P is the amount deposited = $12,000
R is the rate = 5%
T is the time which is 10 years
Plugging these values into the equation
I = (12,000 * 5 * 10)/100 = $6,000
The amount after 10 years is thus the sum of the amount deposited and the interest accured = $12,000 + $6,000 = $18,000
Now for Cameron, we use the compound interest formula
A = P(1+r/n)^nt
Where A is the amount in the account after the number of years
P is the amount deposited = $12,000
r is the interest rate = 4% = 4/100 = 0.04
n is the number of times per year the interest is compounded. Since it is annually, n = 1
t is the time which is 10 years
We plug these values and we have;
A = 12,000(1 + 0.04/1)^(1 * 10)
A = 12,000 (1.04)^10
A = $17,763 ( to the nearest whole dollars)
Since 18,000 is greater than 17,763, the amount in Marion’s account will be greater at an amount of (18,000 - 17,763) = $237