# Math Help - Compound interest.

1. ## Compound interest.

here is the question

Harry and Potter both would want to have RM 5000, each, to buy a motorcycle. Harry makes a deposit of RM 750 at an interest rate of 4% compounded monthly. If the time taken by both is the same, calculate the annual interest rate charged to Potter if he deposited RM 450 compounded quarterly.

2. ## Re: Compound interest.

where are you stuck?

start by working out how long it takes harry to get RM 5000.

3. ## Re: Compound interest.

First you will have to find the term, you can find this using the data given for Harry.
Then taking that term into context for Potter and find interest rate correspondingly.

4. ## Re: Compound interest.

Originally Posted by jusween
here is the question

Harry and Potter both would want to have RM 5000, each, to buy a motorcycle. Harry makes a deposit of RM 750 at an interest rate of 4% compounded monthly. If the time taken by both is the same, calculate the annual interest rate charged to Potter if he deposited RM 450 compounded quarterly.

The compound interest formula is $A = P\left(1+\dfrac{r}{n}\right)^{nt}$

Where,

A = final amount
P = principal amount (initial investment)
r = annual nominal interest rate (as a decimal)
n = number of times the interest is compounded per year
t = number of years

Get an equation for each one, set the time equal and solve for $r_2$