Cindy invests $3000 in a bond trust that pays 8% interest compounded semiannually. Her friend, Jimmy, invests $3000 in a certificate of deposit that pays 7.75% compounded monthly. Who has more money after 20 years, Cindy or Jimmy?

Cindy has more amount than Jimmy.

Explanation:

Amount invested by Cindy P = $3000

Annual rate of interest = 8%

As the amount is compounded semiannually

So rate of interest %

Time = 20 year

So time period n = 20×2 = 40

So amount own by Cindy

$

Amount deposit by jimmy P = $3000

Annual rate of interest = 7.75 %

As the amount is compounded monthly

So rate of interest %

Time period = 20×12 = 240

So amount own by Jimmy

$

From the calculation we can see that Cindy has more amount than Jimmy.

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