Question

Please help...thank you!!

Suppose that you have $10,000 to invest over a 3 year period. There are two accounts to choose from: 4% compounded monthly or 3.5% compounded continuously.

a. Write the formula for the first account’s compound interest for n compoundings per year.
b. Write the formula for the account with continuously compounded interest.
c. Use the formulas and information above to solve for the balance of each investment after 3 years.
d. Which investment account offers a better return on your money?

Answer 1

the formulas are all over the place on the internet.

I = P(1+r/n)^(n*t) is compunded per n cycles a year for t years

Answer 2

I = Pe^(rt) is continuous at rate r for t years

Answer 3

I is prolly a bad choice of variable tho :)