Answer:
$682.50
Explanation:
Given;
The amount invested by the Peter = $100,000
Interest rate = 12% annually
The amount invested by the Martha = $100,000
Interest rate = 12% compounded monthly
Now,
The Total amount received by the Peter at the end of the year
= Amount invested × ( 1 + Annual interest rate )
= $100,000 × ( 1 + 0.12 )
= $112,000
The amount received by the Martha
since it is compounded monthly,
we have
Amount received by Martha = Amount invested × ( 1 + r )ⁿ
here,
r is the monthly return i.e 12% / 12 = 1%
n is the time period in months = 1 year = 12 months
thus, on substituting the respective values, we get
Amount received Martha = $100,000 × ( 1 + 0.01 )¹²
or
The amount received by Martha = $112,682.50
Hence,
The amount of more money Martha have = $112,682.50 - $112,000
or
The amount of more money Martha have = $682.50