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.
How much does Mika have in the account at the end of eight years? Round your answer to the nearest dollar.
$34104
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?
1 answer
Mika received more interest than Camila because she deposited a lump sum of $24000 initially, allowing the account to accumulate interest on a larger principal amount over the 8-year period. Camila, on the other hand, made monthly deposits of $250, resulting in a smaller principal amount for the account to earn interest on each month.
1 answer