Answer:
C) $10,000 invested at 6.7% compounded quarterly over 7 years yields the greater return.
Step-by-step explanation:
-We determine the effective interest rate in both scenarios and use it to calculate the investment's value after 7 years.
#Given n=7yrs, P=$10,000 and i=6.6% compounded monthly:
#Given n=7rs, P=10000, i=6.7%
Hence, the investment has the largest value($15,921.75) when the interest rate is compounded quarterly.
Answer:
$1,179
Step-by-step explanation:
Lets use the compound interest formula provided to solve this:
<em>P = initial balance</em>
<em>r = interest rate (decimal)</em>
<em>n = number of times compounded annually</em>
<em>t = time</em>
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First, lets change 2.6% into a decimal:
2.6% -> -> 0.026
Since the interest is compounded quarterly, we will use 4 for n. Lets plug in the values now:
The account balance after 10 years will be $1,179