Question

Assume that you invest $500 dollars into an account that pays continuous interest at a rate of 3% and a friend of yours invests $250 dollars into an account that pays monthly interest at a rate of 4%. Will there be a time that both your friend and you will have the same amount of money in your accounts? If so, after how many years will that happen? What does these two investments tell you in the long run?

Answer 1

$500*1.03*t = $250*1.04*t , solve for t. This is the time at which the investments will yield the same amount