Question 47662
Which of the given interest rates and compounding periods would provide the better investment?
FORMULA IS 
A=P{1+R/100N}^NT
(a) 9 1/4% per year, compounded semiannually
R=9.25....T=??..TAKEN AS 1 YEAR...N=2
A=P(1+9.25/200)^2=1.09464P
(b) 9% per year, compounded continously 
R=9........T=1......N=TENDS TO INFINITY
A=P(1+9/100N)^N...LIMIT N TENDING TO INFINITY..
=P(1+1/X)^X}^9/100.....WHERE X=100N/9
=P(E)^(9/100)=1.09417
HENCE 9 1/4% AT 6 MONTHS COMPOUNDING GIVES HIGHER RETURN