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Jack have $5000 to invest for 5 years. There are two different investment plans available. One...

Jack have $5000 to invest for 5 years. There are two different investment plans available. One is 3% compounded semiannually. The other one is 3.1% compounded annually. Which investment plan can give Jack more money after 5 years? How much money does each investment plan yield? Round the answer to the whole numbers.

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Answer #1

The compound interest formule - (1 + ico) A = px where, A Amount at end of the specific time period P-s principal Amount R RaWe use the formula of the compound interest which has been mentioned above and calculate the amount yielded at the end of 5 years for both the plans.

The first investment plan yields a compound interest of 5803 - 5000 = $803. And the total amount yielded is $5803.

The second investment plan yields a compound interest of 5825 - 5000 = $825. And the total amount yielded is $5825.

Hence the second investment plan yields more money.

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