Please HELP me with this question!?

0 ⤊

Please HELP me with this question!?

Which is the best investment option for any amount of money invested for 4 years?

a) 7%/a, compounded monthly
b) 7.1%/a, compounded quarterly
c) 7.2%/a, compounded annually

2007-03-05 03:34:48 · 3 answers · asked by Count C 1 in Science & Mathematics ➔ Mathematics

3 answers

We need to compare the yearly growth factor, the part of the formula in brackets:

A = P[ (1 + r/n)^n]^t

a) (1+.07/12)^12 = 1.07229
b) (1+.071/4)^4 = 1.07291
c) (1.072)^1 = 1.072

b wins by 0.06%

2007-03-05 03:45:32 · answer #1 · answered by Philo 7 · 0⤊ 0⤋

obviously , the first option !!! the lesser the time, the more is the compound interst

2007-03-05 03:38:43 · answer #2 · answered by Cave H 1 · 0⤊ 0⤋

Last one.

2007-03-05 03:45:54 · answer #3 · answered by ag_iitkgp 7 · 0⤊ 0⤋