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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?
 11 months ago
 11 months 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?
 11 months ago
 11 months ago

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satellite73Best ResponseYou've already chosen the best response.1
you need to compute three numbers \[(1+\frac{.0375}{4})^4\] \[(1+\frac{.0385}{12})^{12}\] \[(1+\frac{.0395}{365})^{365}\]
 11 months ago

starrhunterBest ResponseYou've already chosen the best response.0
so which ever equals at least "4" will give me the answer then?
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
each will look like \(1+.0somthing\) choose the one or ones with the something greater than or equal to 4
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
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
 11 months ago

starrhunterBest ResponseYou've already chosen the best response.0
wait the first two equations are mixed up am i right?
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
oh yeah my fault, sorry
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
\[(1+\frac{.0375}{12})^{12}\]
 11 months ago

starrhunterBest ResponseYou've already chosen the best response.0
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?
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
\[(1+\frac{.0385}{4})^{4}\] good catch
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
here is the first one http://www.wolframalpha.com/input/?i=%281%2B.0375%2F12%29^12
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
you can see that the answer is \[1.033815...\]
 11 months ago

starrhunterBest ResponseYou've already chosen the best response.0
so that one can be ruled out
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
so this one is out since it is smaller than \(1.04\)
 11 months ago

starrhunterBest ResponseYou've already chosen the best response.0
I'll try the second one..
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
ok you can edit the one i did to compute it if you like
 11 months ago

starrhunterBest ResponseYou've already chosen the best response.0
is the little 4 on the outside an exponent?
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
yes, that needs to be a 4, and also the denominator under \(.0385\) should be a 4 also
 11 months ago

starrhunterBest ResponseYou've already chosen the best response.0
1.039 is what it gave me
 11 months ago

starrhunterBest ResponseYou've already chosen the best response.0
it is the last one, it gave me 1.04
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
then i guess that is the one you want
 11 months ago

starrhunterBest ResponseYou've already chosen the best response.0
thanks for the help
 11 months ago

satellite73Best ResponseYou've already chosen the best response.1
you good with this?
 11 months ago
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