Question

Please help?

George is comparing three investment accounts offering different rates.

Account A: APR of 3.75 compounding monthly
Account B APR of 3.85 compounding quarterly
Account C APR of 3.95 compounding daily

Which account will give George at least a 4% annual yield?

Answer 1

you need to compute three numbers
\[(1+\frac{.0375}{4})^4\]
\[(1+\frac{.0385}{12})^{12}\]
\[(1+\frac{.0395}{365})^{365}\]

Answer 2

so which ever equals at least "4" will give me the answer then?

Answer 3

each will look like \(1+.0somthing\) choose the one or ones with the something greater than or equal to 4

Answer 4

none will give you 4
if the answer looks like \(1.04...\) then that is a yield of larger than \(4\%\)
if the answer is \(1.03...\) then no

Answer 5

wait
the first two equations are mixed up am i right?

Answer 6

oh yeah my fault, sorry

Answer 7

\[(1+\frac{.0375}{12})^{12}\]

Answer 8

it's quite alright. I know how to set up the problem now. but about the yeild, the number won't equal 4, but if the last digit in the number is greater than or equal to 4 than that is the answer i would choose?

Answer 9

\[(1+\frac{.0385}{4})^{4}\]
good catch

Answer 10

lets compute one

Answer 11

here is the first one
http://www.wolframalpha.com/input/?i=%281%2B.0375%2F12%29^12

Answer 12

you can see that the answer is
\[1.033815...\]

Answer 13

so that one can be ruled out

Answer 14

so this one is out since it is smaller than \(1.04\)

Answer 15

right

Answer 16

I'll try the second one..

Answer 17

ok you can edit the one i did to compute it if you like

Answer 18

is the little 4 on the outside an exponent?

Answer 19

yes, that needs to be a 4, and also the denominator under \(.0385\) should be a 4 also

Answer 20

1.039 is what it gave me

Answer 21

me too

Answer 22

it is the last one, it gave me 1.04

Answer 23

then i guess that is the one you want

Answer 24

thanks for the help

Answer 25

you good with this?

Answer 26

yw

Answer 27

yes indeed :3