Answer :
Answer:
Account 2 because it earns $18.12 more than Account 1
Explanation:For account 1
Principal, P = $600
Interest rate, r = 4.2% = 4.2/100
r = 0.042
Time, t = 7 years
Number of times the interest is compounded per year, n = 12
The amount after 7 years is calculated below
[tex]\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ A=600(1+\frac{0.042}{12})^{12(7)} \\ A=600(1.0035)^{84} \\ A=804.657 \end{gathered}[/tex]Earning = Amount - Principal
Earning = 804.657 - 600
Earning on account 1= $204.657
For account 2
Principal, P = $650
Interest rate, r = 4.2% = 4.3/100
r = 0.043
Time, t = 7 years
Number of times the interest is compounded per year, n = 1
The amount after 7 years is calculated below
[tex]\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ A=650(1+\frac{0.043}{1})^{1(7)} \\ A=872.78 \end{gathered}[/tex]Earning = Amount - Principal
Earning = $872.78 - $650
Earning on account 2 = $222.78
Difference in earnings between accounts 1 and 2 = $222.78 - $204.657
Difference in earnings between accounts 1 and 2 = $18.123
Account has a higher return because it earns $18.12 more than Account 1