Question

A bank gives you two options to choose from for your investments. Decide which is the better investment at the end of 2 years.

Option A: 5% annual interest rate compounded yearly; and
Option B: 4.95% annual interest rate compounded quarterly

Answer 1

I used the online interest calculator at http://www.webmath.com/_answer.php.

Ii made up an initial amount of $100 for both.

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Option B: 4.95% annual interest rate compounded quarterly --> Answer by a few cents

$100.00 × (1+0.05)2=$110.25
an initial investement of $100
• at 5% annual interest,
• compounded 1 times per year,
• after 2 year(s).

$100.00 × (1+0.012375)8=$110.34
an initial investement of $100
• at 4.95% annual interest,
• compounded 4 times per year,
• after 2 year(s).

Answer 2

option b is the answer

Answer 3

thank yououuuu(: