Question
Suppose that you have $ 5,000 to invest. Which investment yields the greater return over 9 years: 8.75% compounded continuously or 8.9% compounded semiannually?
.
A) $ 5,000 invested at 8.9% compounded semiannually over 9 years yields the greater return.
B) Both investment plans yield the same return.
C) $5,000 invested at 8.75% compounded continuously over 9 years yields the greater return.
.
A) $ 5,000 invested at 8.9% compounded semiannually over 9 years yields the greater return.
B) Both investment plans yield the same return.
C) $5,000 invested at 8.75% compounded continuously over 9 years yields the greater return.
Answers
The $5,000 don't matter.
All you have to do is compare
(1 + ..089/2)^2 with e^(.0875)
All you have to do is compare
(1 + ..089/2)^2 with e^(.0875)
ok thx
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