Yossarian deposits $160 per month into an annuity that pays 6% compounded monthl

Question

Yossarian deposits $160 per month into an annuity that pays 6% compounded monthly, while Holdcn deposits SI920 at the end of each year into an annuity that pays 6% compounded yearly. Answer the following questions. After ten years, who has deposited more money into an annuity? Ok They both deposited an equal anmunity? b Not enough information to answer. c Holden 0 Yossarian After ten years, who has more money in their annuity? O Yossarian b Not enough information to answer. c HoVden 0 They both have an equal amount How much more does the person with more have in his >>nnu.ty? (Round each person's toul amount to the nearest dollar before finding this answer).

Explanation / Answer

Yossarian deposits $ 160 per month

therefore, 160 * 12 per year i.e. $ 1920 per year

So, in 10 years = 1920 * 10

= $ 19200 in 10 years

Similarly, we calculate amount deposited by Holden in 10 years.

Amount deposited by Holden in 1 year = $ 1920

So, amount deposited by Holden in 10 years = 1920 * 10

= $ 19200

Hence,

Both Holden and Yossarian have deposited equal amount at the end of 10 years.

=

2.)

After 10 years amount with Yossarian will be

$1,819.40

= approximately $ 1819

And

After 10 years amount with Holden will be

$3,438.43 = approximately $ 3438

Now,

Amount of difference = 3834 - 1819

= $ 2015

$1,819.40

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