You have $2,000 in an account which pays 2.9% compounded annually. How many additional dollars of interest would you earn over 4 years if you moved the money to an account earning 4.4% compounded quarterly?

Instructions are listed below.

Explanation:

Giving the following information:

You have $2,000 in an account which pays 2.9% compounded annually.

Second option:

An account earning 4.4% compounded quarterly.

Number of years= 4 years

To compare, we need to use the final value formula:

FV= PV*(1+i)^n

The option with greater final value is the most profitable.

Option 1:

PV= 2,000

i= 0.029

n= 4

FV= 2,000*(1.029)^4= $2,242.30

Option 2:

PV= 2,000

i= 0.044/4= 0.011

n= 4*4= 16

FV= 2,000*(1.011^16)= $2,328.59

Option 2 is the most profitable.

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi