Question

Order the situations from the account that yields the greatest amount to one that yields the least amount.

​Situation A: You invest $500 in an account at a 12% interest rate, compounded monthly, for 12 years.
​Situation B: You invest $500 in an account at a 10% interest rate, compounded quarterly, for 15 years.
​Situation C: You invest $500 in an account at a 15% interest rate, compounded annually, for 10 years.

Answer 1

Order from the greatest yield to the least as follows

1. Situation B=$2,119.8949

2. Situation A=$2,095.3078

3. Situation C=$2,022.7789

Explanation:

Situation A

A=P(1+r/n)^nt

=500(1+0.12/12)^12*12

=500(1+0.01)^144

=500(1.01)^144

=500(4.1906155936008)

=$2,095.3078

Situation B

A=P(1+r/n)^nt

=500(1+0.1/4)^4*15

=500(1+0.025)^60

=500(1.025)^60

=500(4.3997897488150)

=$2119.8949

Situation C

A=P(1+r)^t

=500(1+0.15)^10

=500(1.15)^10

=500(4.0455577357079)

=$2022.7789

Order from the greatest yield to the least as follows

1. Situation B=$2,119.8949

2. Situation A=$2,095.3078

3. Situation C=$2,022.7789