pose Brian has $1000 to lend to one of two friends for 6 months. The first friend, Tom, is offering to pay him 9% interest compounded quarterly. The second friend, Steven, is willing to pay him 8.8% interest compounded daily. a) Compute the future value if Brian were to give his $1000 to Tom. Round your answer to the nearest cent b) Compute the future value if Brian were to give his $1000 to Steven. Round your answer to the nearest cent. c) Every cent is important to Brian. Which friend is offering Brian the better deal
uppose Brian has $1000 to lend to one of two friends for 6 months. The
first friend, Tom, is offering to pay him 9% interest compounded quarterly. The second
friend, Steven, is willing to pay him 8.8% interest compounded daily.
a) Compute the
answer to the nearest cent
b) Compute the future value if Brian were to give his $1000 to Steven. Round your
answer to the nearest cent.
c) Every cent is important to Brian. Which friend is offering Brian the better deal?
Future value of money increases with more compounding because effective interest rate increases with more compounding due to more accumulation of interest.
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