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20 May, 22:11

Two investments are made at the same time. The first consists of investing 1480 dollars at a nominal rate of interest of 7.7 percent convertible semiannually. The second consists of investing 1300 dollars at a nominal rate of interest of 7.7 percent convertible daily. How long will it take for the two investments to be worth exactly the same amount?

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  1. 20 May, 23:34
    0
    2.01yrs

    Explanation:

    future value = present value * (1+r) ^n

    where r = interest rate per period

    and n = number of periods

    =>

    1480 * (1+7.7%/2) ^n = 1300 * (1+7.7%) ^n

    =>

    n = 2.01 year
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