Answer to Question #104461 in Financial Math for Terry Teague

Question

You have ​$600 in an account which pays 4.5​% compounded annually. How many additional dollars of interest would you earn over 9 years if you moved the money to an account earning 6.8​%?

Answer 1

additional dollars of interest = [P*(1 + i₂)ⁿ] – [P*(1 + i₁)ⁿ] = [600*(1 + 0.068)⁹] – [600*(1 + 0.045)⁹] = 193