Asked by Beth
                May Wattson has 50000 to invest in a 4-year certificate of deposit that earns an interest rate of 3.75% compounded monthly or 3.50% compounded daily. Based on annual yield which is the better investment?
            
            
        Answers
                    Answered by
            Reiny
            
    3.75% compounded monthly:
let the annual rate be i
1+i = (1 + .0375/12)^12
1+i = 1.038151..
i = .038151 = 3.8151 %
follow the same steps I showed you in your previous post for the daily compounding question.
Then compare the annual rates
    
let the annual rate be i
1+i = (1 + .0375/12)^12
1+i = 1.038151..
i = .038151 = 3.8151 %
follow the same steps I showed you in your previous post for the daily compounding question.
Then compare the annual rates
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