Jenny invests $20,000 in an account earning 4.5% interest, compounded annually. Cam invests $20,000 in an account earning 6.5% interest, compounded annually. Given that no additional deposits are made, compare the balances of the two accounts after 5 years. (round to the nearest dollar)A) Cam has $2,082 more in his account than Jenny. B) Jenny has $2,082 more in her account than Cam. C) Cam has $2,478 more in his account than Jenny. D) Jenny has $2,478 more in her account than Cam.
Accepted Solution
A:
Compound interest is given by: A=P(1+r/100)^n Amount Jenny earned after 5 years will be: A=20000(1+4.5/100)^5 A=$24,923.64