Precalculus (6th Edition) Blitzer

Published by Pearson
ISBN 10: 0-13446-914-3
ISBN 13: 978-0-13446-914-0

Chapter 3 - Section 3.1 - Exponential Functions - Exercise Set - Page 449: 56

Answer

The $8.25\%,$ compounded quarterly investment yields the greater return.

Work Step by Step

Semiannual compounding, $ t=4,\quad r=0.0825,\quad n=2$: $ A=6000(1+\displaystyle \frac{0.0825}{4})^{4(4)}= {{\$}} 8317.84$ Quarterly compounding, $ t=4,\quad r=0.083,\quad n=4$: $ A=6000(1+\displaystyle \frac{0.083}{2})^{2(4)}={{\$}} 8306.64$ The $8.25\%,$ compounded quarterly investment yields the greater return.
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