To save money to use as a down payment for a home in eight years, Mika deposits a lump sum of $24000 in an account that pays 4.4% interest, compounded monthly.

Question

How much does Mika have in the account at the end of eight years? Round your answer to the nearest dollar.
$
How much interest has this account accumulated?
$
Camila is also saving money for a down payment on a home. Camila makes a deposit of $250 each month in an account that pays 4.4% interest, compounded monthly.
How much does Camila have in the account at the end of eight years?
$
How much interest has this account accumulated?
$
Why did Mika recieve more interest than Camila?

Answer 1

Mika has $37,568 in the account at the end of eight years.

The interest accumulated in Mika's account is $13,568.

Camila has $31,106 in the account at the end of eight years.

The interest accumulated in Camila's account is $7,106.

Mika received more interest than Camila because she deposited a lump sum of $24000 at the beginning, allowing for higher interest accumulation over the eight years compared to Camila's monthly deposits of $250. Additionally, Mika's interest is compounded on the full lump sum amount, while Camila's interest is only compounded on the monthly deposits.