anonymous
  • anonymous
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?
Mathematics
  • Stacey Warren - Expert brainly.com
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SOLVED
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schrodinger
  • schrodinger
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anonymous
  • anonymous
you need to compute three numbers \[(1+\frac{.0375}{4})^4\] \[(1+\frac{.0385}{12})^{12}\] \[(1+\frac{.0395}{365})^{365}\]
anonymous
  • anonymous
so which ever equals at least "4" will give me the answer then?
anonymous
  • anonymous
each will look like \(1+.0somthing\) choose the one or ones with the something greater than or equal to 4

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More answers

anonymous
  • anonymous
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
anonymous
  • anonymous
wait the first two equations are mixed up am i right?
anonymous
  • anonymous
oh yeah my fault, sorry
anonymous
  • anonymous
\[(1+\frac{.0375}{12})^{12}\]
anonymous
  • anonymous
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?
anonymous
  • anonymous
\[(1+\frac{.0385}{4})^{4}\] good catch
anonymous
  • anonymous
lets compute one
anonymous
  • anonymous
here is the first one http://www.wolframalpha.com/input/?i=%281%2B.0375%2F12%29^12
anonymous
  • anonymous
you can see that the answer is \[1.033815...\]
anonymous
  • anonymous
so that one can be ruled out
anonymous
  • anonymous
so this one is out since it is smaller than \(1.04\)
anonymous
  • anonymous
right
anonymous
  • anonymous
I'll try the second one..
anonymous
  • anonymous
ok you can edit the one i did to compute it if you like
anonymous
  • anonymous
is the little 4 on the outside an exponent?
anonymous
  • anonymous
yes, that needs to be a 4, and also the denominator under \(.0385\) should be a 4 also
anonymous
  • anonymous
1.039 is what it gave me
anonymous
  • anonymous
me too
anonymous
  • anonymous
it is the last one, it gave me 1.04
anonymous
  • anonymous
then i guess that is the one you want
anonymous
  • anonymous
thanks for the help
anonymous
  • anonymous
you good with this?
anonymous
  • anonymous
yw
anonymous
  • anonymous
yes indeed :3

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