Aina and Joan invest in each account.Aina invests Php 275,000 at 10% for 15 years and joan invests Php 275,000 at 12% for 12 years.Both investments are compounded annually.Which one will yield more?
Compound Interest:
"A = P(1 + \\frac{r}{n})^{nt}"
P: the principal, amount invested
A: the new balance
t: the time
r: the rate, (in decimal form)
n: the number of times it is compounded.
Aina:
P = 275000
t = 15
r = 0.10
compounded annually, n = 1
"A = 275000(1 + \\frac{0.10}{1})^{1 \\times 15} = 1148743.24"
Joan:
P = 275000
t = 12
r = 0.12
compounded annually, n = 1
"A = 275000(1 + \\frac{0.12}{1})^{1 \\times 12} = 1071393.39"
Aina will yield more.
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