If you invest $7700 for six years, are you better off with an interest rate of 4% compounded quarterly or 3.7% compounded continuously?

Question

anonymous · Answer

the answer is quarterly but i got a higher number for continuously.

anonymous · Answer

can someone work this out so i can see what i did wrong?

anonymous · Answer

here are the formulas: p(1+r/n)^nt (is the regular one)
                                 pe^rt (is the continuous one)

turingtest · Answer

P=7700 t=6
quarterly: n=4 r=0.04
$$P(1+r/n)^{nt}=7700(1+0.04/4)^{4*6}\approx9777$$
continuous: r=0.037
$$Pe^{rt}=7700e^{0.036*6}\approx9556$$
so the answer should be quarterly. I don;t know where you went wrong.

anonymous · Answer

I used the same rate for both like a dummy

anonymous · Answer

Thanks!