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college algebra word problem...HELP :(?
Ellen has recently inherited $6200, which she wants to deposit into a IRA account. She has determined that her two bets are an account that compounds quaterly at an annual rate of 4.5%(account 1), and an account that compounds monthly at an annual rate of 5%(account 2)... How much would Ellens balance be from Account 2 over 2.7 years? Round to two decimal places... PLEASE HELP!
2 Answers
- ?Lv 78 years agoFavorite Answer
7094.14 === 6200*(1 + .05/12)^(12 * 2.7 yrs) <--- although that is not totally precise
7082.35 = 6200*(1 + .05/12)^(12 + 12 + 8) then add on 12 days of earned interest (.4*30)
++11.64 ,,, which was NOT compounded.
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7093.99 ... which is a lot of work for a 15 cent difference
P S Ellen has to have earned income before she can put money into an IRA. Secondly, she cannot put in $6,200 into her account alone (as per past rules)
Source(s): accountant
