Question

Kim has $18,000 to invest. Choose the option that will earn her the most money. Question 1 options: 4.5% compounded annually for 2 years. 2.56% compounded annually for 4 years 3.65% compounded annually for 2 years. 3.48% compounded annually for 3 years.

Answer 1

Hey, the answer is 3.48% for 3 years

Step-by-step explanation:Use the formula.

A=p(1+r)^t Plug the numbers in

P=18,000

R=3.48% but you need to convert it to a decimal which equals to 0.0348

T=3 years

Answer 2

2.56% compounded annually for 4 years will earn her the most money.

Explanation:

Amount at Compound Interest, A=P(1+r)ⁿ

The amount for each investment plan is calculated and comparison is done.

4.5% compounded annually for 2 years.

A=18000(1+0.45)²=18000(1.45)²=$37845

2.56% compounded annually for 4 years

A=18000(1+0.256)⁴=18000(1.256)⁴=$44795.16

3.65% compounded annually for 2 years.

A=18000(1+0.365)²=18000(1.365)²=$33538.05

3.48% compounded annually for 3 years.

A=18000(1+0.348)³=18000(1.348)³=$44090.21