Sheldon invests $15,000 in an account earning 3% interest, compounded annually for 12 years. Seven years after Sheldon's initial investment, Howard invests $15,000 in an account earning 6% interest, compounded annually for 5 years. Given that no additional deposits are made, compare the balances of the two accounts after the interest period ends for each account. (round to the nearest dollar)

Accepted Solution

Sheldon would have $21,386, while Howard would have $20,073.

The equation for each of these will be in the form

where A is the total amount in the account, p is the principal invested, r is the interest rate expressed as a decimal number, and t is the amount of time.

For Sheldon:

For Howard: