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Two brothers, Mark and Steven, each inherit $45000. Mark invests his inheritance in a savings account with an annual return of

3.2 %, while Steven invests his inheritance in a CD paying 4.5 % annually. How much more money than Mark does Steven have after

1 year?

Respuesta :

facundobuzzetti

Answer:

Steven ears $565 more in one year.

Step-by-step explanation:

Giving the following information:

Mark:

PV= $45,000

n= 1

i= 0.032

Steven:

PV= $45,000

n= 1

i= 0.045

To calculate the Future Value of each investment, we need to use the following formula:

FV= PV*(1+i)^n

Mark:

FV= 45,000*1.032= $46,440

Steven:

FV= 45,000*1.045= $47,025

Difference= 47,025 - 46,440= $565

Steven ears $565 more in one year.

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