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PreCalc

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Which investment option will pay the most interest?
A. 12.6% compounded annually
B. 12.4% compounded semiannually
C. 12.2% compounded quarterly
D. 12.0% compounded continuously
E. These investments all pay the same amount of interest.

  • PreCalc -

    a) 1.126^1 =
    b) (1.062)^2 =
    c) (1.0305)^4 =
    d) (e)^.12 =

  • PreCalc -

    Where did you get the values from?

  • PreCalc -

    Are you not studying compound interest?

    e.g.
    c) rate is 12.2 compounded quarterly,
    so in (1+i)^n
    i = .122/4 = .0305
    n = 4

    so (1+.0305)^4 = 1.0305)^4

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