Scott harris can invest $7,000 in a 1-year cd that earns interest at an annual rate of 4 percent compounded monthly. the amount per $1.00 is 1.040742. he can also invest $7,000 in a 1-year cd at annual rate of 4 percent compounded quarterly. the amount per $1.00 is 1.040604. what is the difference in the amount of interest earned for each investment? a) $0.96 b) $0.81 c) $0.87 d) $0.88
option A is answer.
Amount of interest earned for compounded monthly for $1 = 1.040742
Amount of interest earned for compounded quarterly for $1= 1.040604
Difference for $1 = 1.040742 - 1.40604
Difference for $7000 = $7000x0.000138
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