Question

suppose you have a choice between the 3 investments below rank the investments from best to worst. CLEARLY show how you are using the compound interest formulas to answer this question
a) Pays 10.2% interest, compounded annually
b) Pays 10% interest, compounded monthly
c) pays 9.8% interest, compounded continuously

Answer 1

so here is what i did i just want to know i am on right track take home quiz!!
so i did
part A)
\[A=P(1+0.102) = $1102\]
Part B)
\[A=1000(1+\frac{ 0.1 }{ 12 })^{12}=$1104.71\]
and part C)
\[A=1000e ^{0.98}=$2664.46\]
so my order would be c,b,a?
@ranga
@hartnn

Answer 2

first part in a should be instead of p be 1000

Answer 3

Isn't this cba? since annually is a long time monthly is also a long time but continually is good?

Answer 4

??

Answer 5

Best to worst...

Answer 6

ya thats what i have :) is C, B, A :)

Answer 7

C because the 9.8 is in a short period of time...
B because its monthly
A is because its yearly.

Answer 8

:)

Answer 9

You are on the right track. The first two are correct. But the last one, the exponent should be 0.098 not 0.98

Answer 10

ok

Answer 11

so with that change my answer is now b,c,a as my answer for c is now $1102.96

Answer 12

:D thanks

Answer 13

yes. Best to worst: b, c, a.

Answer 14

cool thanks for the help in checking!!

Answer 15

you are welcome.