Patrick and Brooklyn are making decisions about their bank accounts. Patrick wants to deposit $300 as a principle amount, with an interest of 3% compounded quarterly. Brooklyn wants to deposit $300 as the principle amount, with an interest of 5% compounded monthly. Explain which method results in more money after 2 years. Show all work.

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- anonymous

- schrodinger

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- kropot72

You need to use the following formula
\[\large A=P(1+\frac{r}{n})^{nt}\]
where P is the principal, A is the amount after t years, r is the interest rate expressed as a decimal, and n is the number of compounding periods in a year.

- kropot72

So plugging in the values for Patrick's investment
\[\large A _{P}=300(1+\frac{0.03}{4})^{4\times2}\]
and for Brooklyn's investment
\[\large A _{B}=300(1+\frac{0.05}{12})^{12\times2}\]

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- anonymous

Thank you so much!

- kropot72

You're welcome :)

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