starrhunter 2 years ago Please help? George is comparing three investment accounts offering different rates. Account A: APR of 3.75 compounding monthly Account B APR of 3.85 compounding quarterly Account C APR of 3.95 compounding daily Which account will give George at least a 4% annual yield?

1. satellite73

you need to compute three numbers $(1+\frac{.0375}{4})^4$ $(1+\frac{.0385}{12})^{12}$ $(1+\frac{.0395}{365})^{365}$

2. starrhunter

so which ever equals at least "4" will give me the answer then?

3. satellite73

each will look like $$1+.0somthing$$ choose the one or ones with the something greater than or equal to 4

4. satellite73

none will give you 4 if the answer looks like $$1.04...$$ then that is a yield of larger than $$4\%$$ if the answer is $$1.03...$$ then no

5. starrhunter

wait the first two equations are mixed up am i right?

6. satellite73

oh yeah my fault, sorry

7. satellite73

$(1+\frac{.0375}{12})^{12}$

8. starrhunter

it's quite alright. I know how to set up the problem now. but about the yeild, the number won't equal 4, but if the last digit in the number is greater than or equal to 4 than that is the answer i would choose?

9. satellite73

$(1+\frac{.0385}{4})^{4}$ good catch

10. satellite73

lets compute one

11. satellite73

here is the first one http://www.wolframalpha.com/input/?i=%281%2B.0375%2F12%29^12

12. satellite73

you can see that the answer is $1.033815...$

13. starrhunter

so that one can be ruled out

14. satellite73

so this one is out since it is smaller than $$1.04$$

15. satellite73

right

16. starrhunter

I'll try the second one..

17. satellite73

ok you can edit the one i did to compute it if you like

18. starrhunter

is the little 4 on the outside an exponent?

19. satellite73

yes, that needs to be a 4, and also the denominator under $$.0385$$ should be a 4 also

20. starrhunter

1.039 is what it gave me

21. satellite73

me too

22. starrhunter

it is the last one, it gave me 1.04

23. satellite73

then i guess that is the one you want

24. starrhunter

thanks for the help

25. satellite73

you good with this?

26. satellite73

yw

27. starrhunter

yes indeed :3