X must borrow $2000 for 2 years. He is offered the money at:(A) 5% compounded quarterly
(B) %
8
3
5 compounded annually
(C) %
2
1
5 simple interest
Which offer should he accept?
compound: P(1 + r/n)^(n*t)
simple: A = P(1 + rt)
so plug in your numbers and compare.