Answer:
Brody has $2 more than Robert
Step-by-step explanation:
To calculate the value or money in each account after n number of periods, we will use the following formula.
Value = Principal * (1 + i)^n
Where,
Brody
Interest is compounded monthly so we will use monthly interest rate.
Monthly Interest rate = 2% / 12
Number of periods = 10 years * 12 months per year = 120 months
Value = 7000 * (1 + (2%/12))^120
Value = $8548.3960 rounded off to 8548
Robert
Interest is compounded quarterly so we will use quarterly interest rate.
Quarterly Interest rate = 2% / 4
Number of periods = 10 years * 4 quarters per year = 40 quarters
Value = 7000 * (1 + (2%/4))^40
Value = $8545.5596 rounded off to $8546
Difference = 8548 - 8546 = $2
Brody has $2 more than Robert
