To save money to use as a down payment for a home in five years, Thandiwe deposits a lump sum of $15000 in an account that pays 7.6% interest, compounded monthly.
How much does Thandiwe have in the account at the end of five years? Round your answer to the nearest dollar.
$
How much interest has this account accumulated?
$
Joseph is also saving money for a down payment on a home. Joseph makes a deposit of $250 each month in an account that pays 7.6% interest, compounded monthly.
How much does Joseph have in the account at the end of five years?
$
How much interest has this account accumulated?
$
Why did Thandiwe recieve more interest than Joseph?
1 answer
Thandiwe ends up with more money in her account and accumulates more interest than Joseph because she deposited a larger lump sum amount initially. The larger the initial deposit, the more interest it will accumulate over time.
1 answer