# engineering economic

posted by .

Ahmad is considering investing RM2000 to Ali's project at an interest rate 6% compound annually for 5 years or investing RM2000 to Rosli at 7% per year simple interest for 5 years. From your point of view which option is better and state your reason

• engineering economic -

a. P1 = Po(1+r)^n.

r = (6%/100%) = 0.06 = APR expressed as a decimal.

n = 1Comp./yr * 5yrs = 5 compounding periods.

P1 = \$2676.45.

b. P2 = Po + Po*rt.

P2 = 2000 + 2000*0.07*5 = \$2700.

## Similar Questions

1. ### math

an investor is considering investing £5000 over five years in a scheme which offers compound interest of 3.4% compounded annually. what is the total interest paid.
2. ### Visual Basic 2008 Programming

Help! I'm not sure how to start or how calculate. This is the project. Using For Next Loops. - When \$1000 is deposited at 5 percent simple interest, the amount grows by \$50 each year. When money is invented at 5 percent compound interest, …
3. ### finance

If we invest money for 10 years at 8% interest, compounded semi-annually, we are really investing money for ______ six month periods, during which we receive _______ percent interest each year.
4. ### math

Each year, Cathy invests \$1,200 in her account. The account pays an interest rate of 6.3%. The formula to calculate the balance in her account is B =A(1+ r)n+1- A, where r A is the amount invested per year, r is the interest rate, …
5. ### eng economic

Zaki invested RM1000 now and RM1500 2years from now. He invests RM2000 4 years from now at an interest rate of 8% compounded annually. Estimate total amount in 10 years.
6. ### maths

simple interest and compound interest on what sum will the compound interest at 10% per annum for 3 years compounded annually be Rs 331?
7. ### Maths B

Kate is thinking about investing \$45000 for 5 years. She deposits her money into an account which earns interest paid quarterly at a rate of 3.99% p.a. After 1½ years, Kate withdraws her investment (including interest) and deposits …
8. ### MATH HELP

Derrick is investing \$1,000 at 5% interest and Anna is investing \$750 at 7% interest. Both interest rates are compounded annually. When will they have the same amount saved?
9. ### math

Ali needs to borrow Rs 500,000 for three years. Which of the following option is more beneficial for him?
10. ### math(compunded interest )

6.how long will it take for a sum of money to quadruple at 10 percent compounded annually ?

More Similar Questions