Helppp mathhh !! noone in my class can solvee itt !!!!!?

Question

2 accounts contain $1000 and pay 4% interest . One of them compounds the interest quarterly . The other pays simple interest . how much more will the account that compounds quarterly contain after 1 yearr ?????

GODDD helppp me peoplee !!!

Answer 1

The account thats compounded means that the interest will earn interest. Use this formula: P = C(1 + r/n) nt. P = future value; C = initial deposit; r = interest rate (expressed as a fraction: e.g. 0.06); n = # of times per year interest in compounded; and t = number of years invested. So,

                    

           P=1000(1+0.04)4

              =1040(4)

              =4160

Answer 2

Let's say the interest is 1 per cent per quarter, to make up 4 per cent per year. This is the simplest assumption to make and leads to the two answers.

Simple interest.

total amount after one year = 1000 +(4*0.01*1000)

that comes to $1040.00

Compound interest.

total amount after one year = 1000(1.01^4)

that comes to $1040.60

The difference is only 60 cents.

Answer 3

1000(1+.04)^4=the amount of quarterly interest.

If simple interest is annual, then

1000(1+.04)^1=simple interest.

put it into your calculator, I do not have one on hand.