(adsbygoogle = window.adsbygoogle || []).push({}); 1. The problem statement, all variables and given/known data

Amy deposited $1000 into an account that earns 8% annual interest compounded every 6 months. Bod deposited $1000 into an account that earns 8% annual interest compounded quarterly. If neither Amy nor Bob makes any additional deposits or withdrawals in 6 months, how much more money will Bob have in his account than Amy?

2. Relevant equations

A = P(1+r/n)^nt

3. The attempt at a solution

For Ammy

P=1000, t=1( annual), n=2 (compounded 6 months), r=8%=0.08

A= 1000(1+0.08/2)^2= 1000(1.04)^2=1.0816= 1081.6

Kindly tell why is the solution wrong?

Zulfi.

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# Homework Help: Compound Interest

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