Consider the pair of savings plans below. Compare the balances in each plan after 10 years. Which person deposited more money in the plan? Which of the two investment strategies is better? Assume that the compounding and payment periods are the same for each pair. Kerry deposits $30 per month in an account with an APR of 5% while Sage deposits $110 per quarter in an account with an APR of 5.5%
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Step 1
- Kerry deposits $30 per month. - There are 12 months in a year, so in 10 years, she will deposit: \( 30 \text{ dollars/month} \times 12 \text{ months/year} \times 10 \text{ years} = 3600 \text{ dollars} \). Show more…
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