Quinn and Julius inherited $50,000 each from their great-grandmother’s estate. Quinn invested her money in a 5-year CD paying 1.6% interest compounded semiannually. Julius deposited his money in a money market account paying 1.05% compounded monthly. How much total money will Quinn have after 5 years?
How much total money will Julius have after 5 years?
Business Math - Henry, Saturday, June 29, 2013 at 8:49pm
P = Po(1+r)^n.
Po = 50000
r = (1.6%/2)/100% = 0.008 = Semi-APR.
n = 2comp./yr. * 5yrs = 5yrs = 10 Compounding periods.
Plug the above values into the given Eq and solve for P.