Question

please help I'm very confused on this!!
Patrick and Brooklyn are making decisions about their bank accounts. Patrick wants to deposit $200 as a principle amount, with an interest of 2%
compounded monthly. Brooklyn wants to deposit $200 as the principle amount, with an interest of 4% compounded quarterly. Find how much money each
will have after 8 years. ​

Answer 1

Step-by-step explanation:

The formula for compound interest is

P = I (1 + r/n)^nt

where

P: the total amount of money in the account after a certain amount of time

I: the principal amount

r: the interest rate as a decimal

n: the number of times a year interest is compounded

t: the number of years passed

For Patrick:

P = 200 (1 + 0.02/12)^12*8

P = 200 (1 + 0.00166667)^96

P = 200 (1.00166667)^96

P = 200 * 1.00166667^96

P = $234.67

For Brooklyn:

P = 200 (1 + 0.04/4)^4*8

P = 200 (1 + 0.01)^32

P = 200 (1.01)^32

P = 200 * 1.01^32

P = $274.99

After 8 years, Patrick has $234.67 and Brooklyn has $274.99