Suppose Carla has $10,000 to invest. Which investment yields the greater return in 2 years: 7% compounded monthly or 6.85% compounded daily?

Question

anonymous · Answer

See, check the value of A in both the cases..

Use the same formula.

P = 10,000

t = 2 years

n = 12 for Compounded Monthly and n = 365 for Compounded Daily

r = 0.07 in first case and r = 0.0685 in second case..

Find A in both the cases and look for which Amount is bigger..

Can you proceed further on your own??

anonymous · Answer

@monroe17  are you solving it or not??

anonymous · Answer

The second is bigger, :)

anonymous · Answer

wait no. first is.

anonymous · Answer

Yes now you are right..

anonymous · Answer

11498.06 compared to 11468.13. The first :) thanks

anonymous · Answer

Yes you have done it correctly..