SOLUTION: Use the compound interest formulas A = P(1 + r/n)^nt and A = Pe^rt to solve. Suppose that you have $10,000 to invest. Which investment yields the greater return over 6 years: 5.4%

Algebra ->  Functions -> SOLUTION: Use the compound interest formulas A = P(1 + r/n)^nt and A = Pe^rt to solve. Suppose that you have $10,000 to invest. Which investment yields the greater return over 6 years: 5.4%      Log On


   

Question 1180114: Use the compound interest formulas A = P(1 + r/n)^nt and A = Pe^rt to solve.
Suppose that you have $10,000 to invest. Which investment yields the greater return over 6 years: 5.4% compounded monthly or 5.5% compounded quarterly?
Answer by ikleyn(52810) About Me  (Show Source):
You can put this solution on YOUR website!
.

Calculate  10000%2A%281%2B0.054%2F12%29%5E%286%2A12%29


and  10000%2A%281%2B0.55%2F4%29%5E%286%2A4%29,  then compare.


In this problem, the formula   A = Pe^rt   is irrelevant.

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For all details and explanations,  look into these two lessons
    - Compounded interest percentage problems
    - Problems on discretely compound accounts
in this site, and learn the subject from there.


After reading these lessons, you will tackle such problems on your own without asking for help from outside.

Also,  you have this free of charge online textbook in ALGEBRA-I in this site
    - ALGEBRA-I - YOUR ONLINE TEXTBOOK.

The referred lessons are the part of this online textbook under the topic "Logarithms".


Save the link to this online textbook together with its description

Free of charge online textbook in ALGEBRA-I
https://www.algebra.com/algebra/homework/quadratic/lessons/ALGEBRA-I-YOUR-ONLINE-TEXTBOOK.lesson

to your archive and use it when it is needed.


Happy learning (!)