MGF 1107 Lecture 4: Conceptual HW 4B JoniHaxhiExam
DepartmentMathematics - General and Fini
Course CodeMGF 1107
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Conceptual Homework 4B
1. Which is the better choice: $2500 deposited for a year: You must show your work below.
a. at a rate of 6.2% compounded quarterly?
b. at a rate of 5.2% compounded daily?
c. At a rate 4.2% compounded continuously?
a. A = P (1 + APR/n) ^ nY
A = 2500$ (1 + 0.062/4) ^ 4 x 1
= 2500$ x 1.0634564532200625
b. A = 2500$ (1 + 0.052/365) ^ 365 x 1
A = 2500$ x 1.0524
A = $2,631
C. A = P x e ^ (APR x Y)
A = 2500$ x e ^ (0.042 x 1)
A = 2500$ x 1.0428
A = $2607
The best work as shown by the results is a.
In there we get 2.658 $ which is the highest amount of interest for 1 year.
2. Decide whether the statement makes sense. Explain your reasoning.
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