Tasha invests $5000 annually at 6% and an additional $5000 annually at 8%. Thomas invests $10000 annually at 7%. Which statement accurately

Question

Tasha invests $5000 annually at 6% and an additional $5000 annually at 8%. Thomas invests $10000 annually at 7%. Which statement accurately compares the two investments if interest is compounded annually

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Isabella 2 weeks 2021-09-12T04:24:03+00:00 2 Answers 0

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    0
    2021-09-12T04:25:19+00:00

    Answer:

    Answer:

    Option B is correct.

    Step-by-step explanation:

    We will compare the interest earned by both.

    Tasha: p = $5000

    r = 6% or 0.06

    n = 1

    So, Amount after a year will be = = $5300

    And amount the next year with p = 5300: 5300*1.06= $5618

    Additional $5000 at 8%

    Here the amount will be = =5400

    Next year amount with p = 5400 : 5400*1.08 = $ 5832

    Amount in total Tasha will have in 2 years = 5618+5832 = 11450

    Thomas:

    p = 10000

    r = 7% or 0.07

    n = 1

    After a year the amount will be = =$10700

    Amount Next year with p = 10700 : 10700*1.07 = $11449

    *****Just after 1 year we can see that Tasha’s total amount is high than Thomas. This means at the same consistent rate, each year Tasha’s amount will always be higher than Thomas.

    So, option B is correct. Tasha’s investment will yield more over many years because the amount invested at 8% causes the overall total to increase faster.

    0
    2021-09-12T04:25:39+00:00

    Answer:

    B) Tasha’s investment will yield more over many years because the amount invested at 8% causes the overall total to increase faster.

    Step-by-step explanation:

    I just took the test on edge

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