Question

Trisha plans to invest $1,800.00 in a savings account. Savings account 1 earns 6% simple interest and savings account 2 earns 6% interest compounded quarterly. If she plans to deposit the $1,800.00 and leave it in the account for 2 years, in which savings account would she earn more interest?

A.
The interest earned in both savings accounts will be the same.
B.
savings account 2

Answer 1

Use this formula:

P = Poe^rt

$1,800.000e^(0.06)(2) = 3,822,611.567563

Well past the 2 years the account will grown from the increase of 6% more so the answer could be B.