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Which investment will earn more money, a $1,000.00 investment for 6 years at continuously or a $1,000.00 investment for 6 years at 12% compounded every 4 a) 11% compounded continuously would be worth $ 870.41

Which investment will earn more money, a $1,000.00 investment for 6 years at continuously or a $1,000.00 investment for 6 years at 12% compounded every 4 a) 11% compounded continuously would be worth $ 870.41

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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**Investment Comparison Problem** This problem challenges you to determine which of two investments will yield more money after 6 years. The options are: 1. A $1,000.00 investment for 6 years at 11% compounded continuously. 2. A $1,000.00 investment for 6 years at 12% compounded every 4 months. **a)** Calculate the future value of the investment compounded continuously at 11%. - Computation Result: $870.41 - Note: Ensure you round your answer to 2 decimal places. **b)** Calculate the future value of the investment compounded every 4 months at 12%. - Computation Result: $1025.82 - Note: Ensure you round your answer to 2 decimal places. **c)** Compare the results: - Option 1: The investment compounded continuously at 11% would be worth more. - Option 2: The investment compounded every 4 months at 12% would be worth more. - Option 3: Both investments would be worth the same. **Conclusion:** According to the calculations, the investment compounded every 4 months at 12% would be worth more.
Transcribed Image Text:**Investment Comparison Problem** This problem challenges you to determine which of two investments will yield more money after 6 years. The options are: 1. A $1,000.00 investment for 6 years at 11% compounded continuously. 2. A $1,000.00 investment for 6 years at 12% compounded every 4 months. **a)** Calculate the future value of the investment compounded continuously at 11%. - Computation Result: $870.41 - Note: Ensure you round your answer to 2 decimal places. **b)** Calculate the future value of the investment compounded every 4 months at 12%. - Computation Result: $1025.82 - Note: Ensure you round your answer to 2 decimal places. **c)** Compare the results: - Option 1: The investment compounded continuously at 11% would be worth more. - Option 2: The investment compounded every 4 months at 12% would be worth more. - Option 3: Both investments would be worth the same. **Conclusion:** According to the calculations, the investment compounded every 4 months at 12% would be worth more.
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