Mario invests $4000 in bonds paying 11.5% interest and $5000 in bank accounts paying 9.1% interest. Which investment yields more interest in one year? and how much more?
2007-02-01 13:06:20 · 3 answers · asked by mary p 1 in Education & Reference ➔ Homework Help
$4000 * 11.5% = $460
$5000 * 9.1% = $455
$460 - $455 = $5
The bonds yield $5 more.
2007-02-01 13:10:33 · answer #1 · answered by kilauea0612 4 · 0⤊ 0⤋
It depends on which account accrues the interest more often. In other words, if one account only pays you interest after 12 months, and other other pays you interest every 3 months - the 3 month one will yield you more. That is the difference between what an account yields and the "annual effective yield."
2007-02-01 13:13:34 · answer #2 · answered by CC 4 · 0⤊ 0⤋
the one paying 11.5%...
2007-02-01 13:09:27 · answer #3 · answered by AA 3 · 0⤊ 0⤋