posted by Preia
Using the formula. I =Prt ,calculate the simple interest where t=1/n and n is the number of periodd per year for compounding.
You have $20,000 and wished to invest it in one of
Option A: You may invest it in a certificate of deposit for 10 years at an interest rate of 4% compounded monthly. (n =12 t =1/12
Option B: You may invest it in a certificate of deposit for 5 years at an interest rate of 8% compounded daily. (n = 360 t = 1/360)
Calculate the amount of interest that you would make each investment.
A.12mo/yr. * 10yrs. = 120 months
I = Po*r*t = 20,000*(0.04/12)*120 =
B. 360days/yr * 5yrs. = 1800 days
I = 20,000*(0.08/360)*1800 =