Question

Joanie takes a $\$6,\!000$ loan to pay for her car. The annual interest rate on the loan is $12\%$. She makes no payments for 4 years, but has to pay back all the money she owes at the end of 4 years. How much more money will she owe if the interest compounds quarterly than if the interest compounds annually? Express your answer as a dollar value to the nearest cent.

Answer 1

Amount she owes compounded quarterly 6000 ( 1 + .12/4)(4*4)

Amount she owes compounded annually 6000(1+.12)4