Suppose that you have $10,000 to invest over a 3 year period. There are two accounts to choose from: 4% compounded monthly or 3.5% compounded continuously.

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asked Sep 25, 2018 59.2k views

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Marcos Boaventura · Answer 1 · 2018-09-29T21:30:33+0000

4% compounded monthly: $10000(1+0.04/12)^36 = $11272.72

3.5% compounded continuously: $10000e^[0.035*3] = $11107.11.

Which one pays the most in interest?

Suppose that you have $10,000 to invest over a 3 year period. There are two accounts to choose from: 4% compounded monthly or 3.5% compounded continuously.

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