Question

Your aunt who died recently left you
$24000. Because of uncertainty in the stock
market you decide to invest the money for the
next 6 years in Money Market Funds. Both
Fund B0 and Fund B1 pay the same annual
nominal interest rate of 9%, but Fund B0 compounds monthly, while Fund B1 compounds
semi-annually. How much more will your investment be worth if you put the money in
Fund B0 rather than Fund B1?
1. difference = $402.11
2. difference = $399.11
3. difference = $398.11
4. difference = $401.11
5. difference = $400.11

Answer 1

Hold on my aunt Died!

Answer 2

what a terriable way to break it to you, through a math question

Answer 3

but in all seriousness (I know I'm lame),
Just use the compound interest formula
n = 2 for semi annually
and
n= 12 for monthly

Answer 4

see picture for the formula

Answer 5

41101.26-40701.15=400.11