At the same time that Rick opened an account
with $150 at Bank A, Mary Jane opened an
account at Bank B with $150. Mary Jane’s
account has 10% simple annual interest and
Rick’s gives 12% annual interest compounded
quarterly. If neither Rick nor Mary Jane make any
additional deposits or withdrawals, then what
percent more does Rick have in his account after
a year?
Ans is
[150 *(1.03)^4 - 150*(1.10)]
-------------------------------------
150*1.10
This is from Princeton. Just wanted to make sure the question is correct with respect to what it is asking for.
"what percent more does Rick have in his account after a year" -> Shouldn't the denominator be 150 and not 150*1.10.
Also in the numerator we should be subtracting 150.
Please explain.
with $150 at Bank A, Mary Jane opened an
account at Bank B with $150. Mary Jane’s
account has 10% simple annual interest and
Rick’s gives 12% annual interest compounded
quarterly. If neither Rick nor Mary Jane make any
additional deposits or withdrawals, then what
percent more does Rick have in his account after
a year?
Ans is
[150 *(1.03)^4 - 150*(1.10)]
-------------------------------------
150*1.10
This is from Princeton. Just wanted to make sure the question is correct with respect to what it is asking for.
"what percent more does Rick have in his account after a year" -> Shouldn't the denominator be 150 and not 150*1.10.
Also in the numerator we should be subtracting 150.
Please explain.
