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sophia and mallory are the same age. at age 25, sophia invests $6,000 at 7 percent, compounded annually. at age 30, mallory invests $6,000 at 7 percent, compounded annually. all else constant, when they both reach age 60: a. mallory will earn more compound interest than sophia. b. mallory will earn more interest on interest than sophia. c. they must wait 10 more years to have equal amounts of savings. d. sophia will have less money when she retires than mallory. e. sophia will have more money than mallory.

Respuesta :

When they both reach the age of 60: e. Sophia will have more money than Mallory

We can determine who had more money at the age of 60 by using the formula for compound interest.

A = P (1 + r/n )^nt

Here P represents inital balance, r represents interest rate, n represents number of times interest applied per time period and t illustrates number of time periods elapsed.

Substituting the values as follows for both Sophia and Mallory as follows;

Final amount for Sophia = 6000 ( 1 + 0.07 )^35

Final amount for Sophia = 6000 (1.07)^35

Final amount for Sophia = $64,060

Now calculating for Mallory as follows;

Final amount for Mallory = 6000 ( 1 + 0.07 )^30

Final amount for Mallory = 6000 ( 1.07 )^30

Final amount for Mallory = $45,674

Therefore; Sophia will have earned more money than Mallory when they both reached the age of 60.

To learn more about compound interest; click here:

https://brainly.com/question/28020457

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