starrhunter
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?
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anonymous
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you need to compute three numbers
\[(1+\frac{.0375}{4})^4\]
\[(1+\frac{.0385}{12})^{12}\]
\[(1+\frac{.0395}{365})^{365}\]
starrhunter
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so which ever equals at least "4" will give me the answer then?
anonymous
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each will look like \(1+.0somthing\) choose the one or ones with the something greater than or equal to 4
anonymous
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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
starrhunter
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wait
the first two equations are mixed up am i right?
anonymous
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oh yeah my fault, sorry
anonymous
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\[(1+\frac{.0375}{12})^{12}\]
starrhunter
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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
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\[(1+\frac{.0385}{4})^{4}\]
good catch
anonymous
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lets compute one
anonymous
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you can see that the answer is
\[1.033815...\]
starrhunter
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so that one can be ruled out
anonymous
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so this one is out since it is smaller than \(1.04\)
anonymous
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right
starrhunter
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I'll try the second one..
anonymous
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ok you can edit the one i did to compute it if you like
starrhunter
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is the little 4 on the outside an exponent?
anonymous
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yes, that needs to be a 4, and also the denominator under \(.0385\) should be a 4 also
starrhunter
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1.039 is what it gave me
anonymous
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me too
starrhunter
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it is the last one, it gave me 1.04
anonymous
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then i guess that is the one you want
starrhunter
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thanks for the help
anonymous
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you good with this?
anonymous
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yw
starrhunter
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yes indeed :3