Mr. Larson is debating between investing $10,000 into an account that pays 4% interest compounded daily or 4.9% compounded weekl
1 answer:
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Answer:
4.9% weekly
Step-by-step explanation:
The compound interest formula is ...
A = P(1 +r/n)^(nt)
where A is the account balance that results from investing P at rate r compounded n times per year for t years.
Filling in the values for the two scenarios, we find ...
A = 10,000(1 +0.04/365)^(365·3) ≈ 11,274.89
A = 10,000(1 +0.049/52)^(52·3) = 11,582.74
The higher interest rate will earn Mr. Larson the most money in three years. (4.9% weekly)
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