Solved

Use the Compound Interest Formulas A A=P(1+rn)nt and A=Pert to solve. A = P \left( 1 + \frac { r } { n } \right) ^ { n t } \text { and } A = P e ^ { r t } \text { to solve. }

Question 42

Multiple Choice

Use the compound interest formulas A A=P(1+rn) nt and A=Pert to solve. A = P \left( 1 + \frac { r } { n } \right) ^ { n t } \text { and } A = P e ^ { r t } \text { to solve. }
-Suppose that you have $4000 to invest. Which investment yields the greater return over 10 years: 6.25% compounded continuously or 6.3% compounded semiannually?


A) $4000 invested at 6.25% compounded continuously over 10 years yields the greater return.
B) $4000 invested at 6.3% compounded semiannually over 10 years yields the greater return.
C) Both investment plans yield the same return.

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