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Harrison and Sherrie are making decisions about their bank accounts. Harrison wants to Put more money as a principle amount, because the more interest you will gain. Sherrie wants to Put the original money in an account with a higher interest rate. Explain which method results in more money after 2 years. Show all work.

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taskmasters

Let us say
that the amount needed to open an account is uniformly 10,000 in both methods
and increases 10% annually and increases 1% per 1000.

Original
amount = 10, 000 ~ 10%


1.      Harrison



10%
~ increases 1% per 1000


Money = 11, 000


Total Interest = 11%



After 2 years = 11,000 x 0.22 = 2420 + 11,000 = 13, 420




2.      Sherrie


10, 000 ~ 11%


Money = 10, 000


Total Interest = 11%


After 2 years = 10, 000 x 0.22 = 2200 + 10, 000 = 12, 200



Hope this is right. What matters is the values the original values and the change in values, it really will depend on the numbers given.


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