SOLUTION: Directions: Use the compound interest formulas A=P(1+r/n )^nt and A=pe^rt to solve. Suppose that you have $7000 to invest. Which investment yields the greater return over 9 y

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Question 363930: Directions:
Use the compound interest formulas A=P(1+r/n )^nt and A=pe^rt to solve.
Suppose that you have $7000 to invest. Which investment yields the greater return over 9 years: 8.75% compounded continuously or 8.9% compounded semiannually?
Can someone help me? I have to show all my work, so any help is greatly appreciated.

Answer by solver91311(24713) About Me  (Show Source):
You can put this solution on YOUR website!


For the 8.9% compounded semi-annually:

, , , and , and the formula to use is:



For the 8.75% compounded continuously,

, , , is the base of the natural logarithms and the formula to use is:



All you have to do is put the numbers in their places and do the arithmetic.

John

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