Sally save $25 per week and in a bank account that gives 4% annual interest. Joh
ID: 1174967 • Letter: S
Question
Sally save $25 per week and in a bank account that gives 4% annual interest. John says $100 per month at a bank that gives 4.125% annual interest. assume that both individuals have zero dollars in their account at the beginning of the savings program. after five years who has more money in their account? Sally save $25 per week and in a bank account that gives 4% annual interest. John says $100 per month at a bank that gives 4.125% annual interest. assume that both individuals have zero dollars in their account at the beginning of the savings program. after five years who has more money in their account?Explanation / Answer
Assuming interest is paid only on year end balance
Sally is saving 25*52=1300 per year
John is saving 100*12=1200 per year
At the end of 5 years:
amount with Sally=1300*1.04^5=1581.65
amount with John=1200*1.04125^5=1468.78
So Sally is having more money