SOLUTION: Which of the given interest rates and compounding periods would provide the best investments? Please explain your answer.
a.8.25% per year, compounded quarterly
b.8.15% per year
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a.8.25% per year, compounded quarterly
b.8.15% per year
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Question 332088: Which of the given interest rates and compounding periods would provide the best investments? Please explain your answer.
a.8.25% per year, compounded quarterly
b.8.15% per year, compounded continuously
You can put this solution on YOUR website! The compounded formula is F=
where F=future value
I=investment amount
r=annual interest rate
n=compounded periods
t=number of years
----
in the case of compounded continuously n-->infinity
so....
in your questions, t=1 for one year
---
a.8.25% per year, compounded quarterly
F=
--
b.8.15% per year, compounded continuously
F=
===
so you can answer you question by looking at both of these.
