Asked by Nonceba
Theo decides to take a loan and wants to invest the money in either of the following options:
Option 1: The R9000 invested at 8% per month simple interest of 3 years.
Option 2: The R9000 invested at 7% per month compound interest for 3years.
Which of the options will be better , show all calculations.
Option 1: The R9000 invested at 8% per month simple interest of 3 years.
Option 2: The R9000 invested at 7% per month compound interest for 3years.
Which of the options will be better , show all calculations.
Answers
Answered by
Tammy
Option 1
amount after 3 years = 9000 + 9000(3)(.08) = 11,160
Option 2
amount after 3 years = 9000(1.07)^3 = 11,025.39
better question:
after how many years would the two investments yield the same amount ?
(hint: tough question)
amount after 3 years = 9000 + 9000(3)(.08) = 11,160
Option 2
amount after 3 years = 9000(1.07)^3 = 11,025.39
better question:
after how many years would the two investments yield the same amount ?
(hint: tough question)
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