SOLUTION: Ashley is comparing three investment accounts offering different rates. Option A: APR of 4.95% compounding monthly Option B: APR of 4.85% compounding quarterly Option C: AP

Algebra ->  Finance -> SOLUTION: Ashley is comparing three investment accounts offering different rates. Option A: APR of 4.95% compounding monthly Option B: APR of 4.85% compounding quarterly Option C: AP      Log On


   

Question 1122635: Ashley is comparing three investment accounts offering different rates.
Option A: APR of 4.95% compounding monthly
Option B: APR of 4.85% compounding quarterly
Option C: APR of 4.895% compounding daily

She would like to earn at least a 5% annual yield. Which account(s) will give Alexandra the yield she wants? (3 points)

Options A and B only

Option B only

Options A and C only
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
Look at each of these annually.
P=Po(1+r/t)^nt
P/Po=1.05
Therefore (1+.0495)/12)^12 for a, and that is =1.0506, so a works
(1+(.0485/4))^4=1.0494, so b does not work
1+(0.04895/365)^365=1.0502, so c works.
A and C