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jenny deposits $50000 in account simple rate 4% per year. Frank deposits $50000 into account compounded annually at 4%

Sagot :

Let's calculate the amounts Jenny and Frank will have after one year with their respective accounts, considering Jenny's account has simple interest and Frank's account has compound interest.

Jenny's Account (Simple Interest):

- Principal (P) = $50,000

- Rate of interest (r) = 4%

- Time (t) = 1 year

The formula for simple interest is:

[tex]\text{Simple Interest (SI)} = P \times r \times t[/tex]

Calculate Jenny's interest:

[tex]\text{SI} = 50000 \times 0.04 \times 1 = 2000[/tex]

Amount after one year:

[tex]\text{Total amount} = P + \text{SI} = 50000 + 2000 = 52000[/tex]

Frank's Account (Compounded Annually):

- Principal (P) = $50,000

- Rate of interest (r) = 4%

- Time (t) = 1 year

The formula for compound interest annually is:

[tex]A = P \left(1 + r\right)^t[/tex]

Calculate Frank's amount:

[tex]A = 50000 \left(1 + 0.04\right)^1 \\\\ A = 50000 \times 1.04 \\\\ A = 52000[/tex]

Therefore, after one year:

- Jenny will have  52000  dollars.

- Frank will also have  52000 dollars.