Question

When Kyle is 6 years old, his parents deposit $5000 into an account that earns 4% interest, compounded annually. On Anna's eighth birthday, her parents also deposit $5000 into an account that earns 4% interest, compounded annually. Assuming no additional deposits are made, compare the balance of Kyle's and Anna's accounts when each reaches 18 years of age. (nearest dollar)

Answer 1

Answer:

Kyle account will have $604 more

Step-by-step explanation:

Kyle time is 12 years while Anna is 10 years. With compound interest formula

$A=P(1+i)^{n}$

Where

A=the future value of the investment

P = Initial deposit

r = the annual interest rate

n = Time in years

For Keyle

$A=5000(1+0.04)^{12}\approx 8005.16$

For Anna

$A=5000(1+0.04)^{12}\approx 7401.22$

Difference will be 8005.16-7401.22=603.94

Therefore, Kyle will have $604 more

Answer 2

Answer: A- Kyle's account balance exceeds Anna's account by $604.

Step-by-step explanation: