Posted by Cassie on .
Greta invests $10,000 in an investment that pays 3% interest, compounded annually, for the first three years, then 9% interest, compounded annually, for the last three years. Rui invests $10,000 in an investment that pays r% for all six years. The two investments are worth the same amount after 6 years. Is (r) greater than, equal to, or less than 6?
Here is the standard equation I was taught:
(1 + r/100m)^nm ($k)
r-- interest rate
m--how many times compounded a year
n--number of years
How would I figure out this problem, preferably using the equation above?
take the interest rate divided by (100 times the compounded) add one take that answer to the (number of years times the compound) multiply this entire total times money times dollars invested