SOLUTION: Hello, I need help with solving this word problem having to do with annual percentage rate: Riley has $2000 to invest. Fishman Investing offers an 8% annual percentage rate compoun

Question 425285: Hello, I need help with solving this word problem having to do with annual percentage rate: Riley has $2000 to invest. Fishman Investing offers an 8% annual percentage rate compounded continuously. Pick and Mendoza Investments offers 8.125% annual percentage rate compounded monthly. Which investment should Riley make and how much money will she make from each over a ten year period?
I tried looking up a formula that has to do with annual percentage and could not find a formula that made since to what I was asked to do in this problem, and if I did find a formula it would not tell me what each letter went with each part of the equation. Also I do not know how to figure out how much money she will make over a ten year period. Thank you so very much for all your time.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Riley has $2000 to invest.
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Fishman Investing offers an 8% annual percentage rate compounded continuously.
A(t) = P*e^(rt)
A(10) = 2000*e^(0.08*10)
A(10) = $4451.08
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Pick and Mendoza Investments offers 8.125% annual percentage rate compounded monthly.
A(t) = P(1+(r/n))^(nt)
A(10) = 2000(1+0.08/12)^(12*10)
A(10) = $4439.28
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Which investment should Riley make and how much money will she make from each over a ten year period?
Answered above.
Cheers,
Stan H.
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