Answer:$266
Step-by-step explanation:
Cameron :
r = 4 3/8% = 0.04375
P = 7400
For account compounded continuously :
A = Pe^it
i = interest ; t number of years ;
A = 7400 * e^0.04375*7
A = 7400 * e^0.30625
A = 10051.581
Savanna:
r = 4 3/4% = 0.0475
P = 7400
A = P(1 + r/n)^nt
n = number of compounding times per period
A = final amount ; P = initial investment
Compounded daily :
A = 7400(1 + 0.0475/365)^365*7
A = 7400(1 + 0.0001301)^2555
A = 7400(1.0001301)^2555
A = 7400 * 1.3942879
A = 10317.731
Difference :
$(10317.731 - 10051.581)
= $266.15
= $266 (nearest dollar)
Step-by-step explanation:
