<PRE><B>Question 960012</B>
Suppose that you have $3000 to invest. Which investment yields the greater return over 10 years: 8.75% compounded continuously or 8.9% compounded semiannually?
-----------------
Continuous at 8.75%::
A(10) = 3000*e^(0.0875*10) = $7196.63
-------------------------
8.9% compounded semiannually::
A(10) = 3000(1+(0.089/2)]^(2*10) = $7166.22
===================
Cheers,
Stan H.
---------------</PRE>