Question

Ashley is comparing three investment accounts offering different rates.

Option A: APR of 4.95% compounding monthly
Option B: APR of 4.85% compounding quarterly
Option C: APR of 4.895% compounding daily

She would like to earn at least a 5% annual yield. Which account(s) will give Alexandra the yield she wants?
Options A and B only
Option B only
Options A and C only
Option C only

Answer 1

\(\left(1 + \dfrac{0.0495}{12}\right)^{12}\)

\(\left(1 + \dfrac{0.0485}{4}\right)^{4}\)

\(\left(1 + \dfrac{0.04895}{365}\right)^{365}\)

Exactly the same sort of construction. Evaluate!