The online institution offers the better deal
Step-by-step explanation:
The formula for compound interest, including principal sum is:
[tex]A=P(1+\frac{r}{n})^{nt}[/tex] , where
∵ The local institution offers a rate of 6% compounded annually
∴ r = 6% = 6 ÷ 100 = 0.06
∴ n = 1
∵ Harrison has a principal amount of $50000
∴ P = 50000
- Substitute all of this values in the formula above, assume that t = 1
∵ [tex]A=50000(1+\frac{0.06}{1})^{(1)(1)}[/tex]
∴ A = 50000(1.06)
∴ A = 53000
∴ The amount of money in the local institution is $53000 after a year
∵ The online institution offers a rate of 6% compounded quarterly
∴ r = 6% = 6 ÷ 100 = 0.06
∴ n = 4
∵ Harrison has a principal amount of $50000
∴ P = 50000
∵ t = 1
- Substitute all of this values in the formula above
∵ [tex]A=50000(1+\frac{0.06}{4})^{(4)(1)}[/tex]
∴ [tex]A=50000(1.015)^{4}[/tex]
∴ A = 53068.17
∴ The amount of money in the online institution is $53068.17
after a year
∵ 53068.17 > 53000
∴ The online institution gives more money than the local institution
∴ The online institution is better
The online institution offers the better deal
Learn more:
You can learn more about the compounded interest in brainly.com/question/2514241
#LearnwithBrainly
