Homework Help: math

Posted by yolanda johnson on Tuesday, January 1, 2013 at 3:15pm.

A client comes to you for investment advice on his $500,000 winnings from the lottery. He has been offered the following options by three different financial institutions and requests assistance to help understand which option would be the best for his investment.

Option 1: 6% compounded interest quarterly for 5 years.
Option 2: 8% compounded interest annually for 5 years.
Option 3: 14.5% simple interest for 10 years.

math - Knights, Tuesday, January 1, 2013 at 5:01pm
Compound interest
P is the principal (the initial amount you borrow or deposit)

r is the annual rate of interest (percentage)

n is the number of years the amount is deposited or borrowed for.

A is the amount of money accumulated after n years, including interest.

When the interest is compounded once a year:

A = P(1 + r)^n
Simple Interest

A = (r/100 * P )n

Answer this Question

Related Questions

math - A client comes to you for investment advice on his $500,000 winnings ...
math/ compounded - Scenario: A client comes to you for investment advice on his...
Finance - a client comes to you for an investment advice on his 500,000 winnings...
Finance - Joseph invested 3/4 of his lottery winnings to a corporate bond which ...
Finance - Suppose the chances of winning the lottery are 1 in 14 million with ...
CPa - A company makes an investment of $150,000 with a useful life of 10 years ...
Finance - A company makes an investment of $150,000 with a useful life of 10 ...
math - When I was considering what to do with my $10,000 Lottery winnings, my ...
Math 1320 - When I was considering what to do with my $10,000 Lottery winnings, ...
math - When I was considering what to do with my $10,000 Lottery winnings, my ...

For Further Reading

First Name:
School Subject:
Answer: