Problema Solution
Which investment results in the greatest total amount?
Investment A: $5,000 invested for 7 years compounded semiannually at 6%.
Investment B: $7,000 invested for 4 years compounded quartly at 2.7%.
Find the total amound of investment A.
Round to the nearest cent as needed
Answer provided by our tutors
Formulae A = P*(1+(r/n))^(n*t)
Investment A:
"$5,000 invested" ===> P = 5,000
"for 7 years" ===> t = 7
"compounded semiannually" ===> n = 2
"at 6%." ===> r = 0.06
then total amount of A = 5,000*(1+(0.06/2))^(2*7) = 7562.95
Investment B:
total amount of B = 7,000*(1+(0.027/4))^(4*4) = 7795.50