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Larry and Peggy are making decisions about their bank accounts. Larry wants to deposit $250 as a principal
amount, with an interest of 5% compounded quarterly. Peggy wants to deposit $250 as the principal amount, with an interest of 6% compounded monthly. Explain which method results in more money after two years. show all work

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Answer:

Step-by-step explanation:

The method that results in more money after 2 years is Peggy's investment.

Which method results in more money in 2 years?

The formula for calculating the future value of an investment:

FV = P (1 + r)^nm

FV = Future value

P = Present value

R = interest rate

m = number of compounding

N = number of years

Future value of Larry's investment: $350 x [1 + (0.04/4)]^(4 x 2) = $379

Future value of Peggy's investment: $350 x [1 + (0.06/12)]^(12 x 2) = $394.51

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