Precalculus: Concepts Through Functions, A Unit Circle Approach to Trigonometry (3rd Edition)

Published by Pearson
ISBN 10: 0-32193-104-1
ISBN 13: 978-0-32193-104-7

Chapter 4 - Exponential and Logarithmic Functions - Section 4.7 Financial Models - 4.7 Assess Your Understanding - Page 346: 28

Answer

$9\%$ compounded quarterly

Work Step by Step

1. For $9\%$ compounded quarterly for one year, we have $A_1=P(1+\frac{0.09}{4})^4\approx1.0931P$ 2.For $9\frac{1}{4}\%$ compounded annually for one year, we have $A_2=P(1+\frac{0.0925}{1})=1.0925P$ 3. Thus $9\%$ compounded quarterly is better.
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