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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Business

Travis Roman

8 December, 20:50

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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Turner Scott · Answer 1

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