1- Discuss which would be a better investment if you were investing for a period of 5 years. Please...

Question

1- Discuss which would be a better investment if you were investing for a period of 5 years. Please provide all details.

Option 1: $2000 invested at 6% compounded quarterly
Option 2: $2000 invested at 2% compounded continuously

2-

You just had a baby and want to invest for his college tuition. You found two different accounts:
In account one you have to invest $2500 at 2% compounded monthly.
In account two, you have to invest $2000 at 4% compounded annually.
If you predict that your child will be entering college in 17 years, which account would produce more interest over that time?

David · Accepted Answer

The formula for calculating compound interest is as follows – 
The formula for annual compound interest, including principal sum, is: 
A = P (1 + r/n) (nt)
Where:
A = the future value of the investment/loan,

1- Discuss which would be a better investment if you were investing for a period of 5 years. Please provide all details. Option 1: $2000 invested at 6% compounded quarterly Option 2: $2000 invested at...

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