Ava deposits $120 into a savings account at the end of every month for 8 years a

Question

Ava deposits $120 into a savings account at the end of every month for 8 years at 6.3% annual interest compounded monthly. Burt makes a one-time deposit of $8,000 in a savings account at 6.3% annual interest compounded monthly. (a) How much will Ava have in her account at the end of eight years? Show work. (b) How much will Burt have in his account at the end of eight years? Show work. (c) Who has more money in his/her account at the end of eight years, Ava or Burt? _____ (d) How much has each person earned in total interest, at the end of eight years? Who earned more in total interest?

Explanation / Answer

a) Ava have her acc. at the end of 8 years= Monthly = P (1 + r/12)12 = (monthly compounding) so,monthly=198.37$ in 8 year b) burt have acc at end of 8 years= Annually = P × (1 + r) = (annual compounding) =13042.35$ c) burt have more money in his account. d)burt have more interset by( 13042.35-8000)=5042.35$ but ava have interest= 79$

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.