George wants to invest $20,000 one investment pays interest at a rate of 18 2/3% while another pays interest at a rate of 0.1872 which is the better investment?

Investment with interest rate 0.1872 is better

Step-by-step explanation:

Given as :

George investment principal = $20,000

The Rate of interest  (R1)   = 18 % = %

I.e   R1 = 18.67 %

Again The The Rate of interest  (R2)  = 0.1872  = 18.72 %

Let the time period for both rate of interest = 1 years

Now from compound interest method

Amount = Principal ×

Or,    A 1 = $ 20 , 000 ×

Or,    A 1 = $ 20 ,000 × 1.1867

∴       A 1 = $ 23,734

And   A 2 = $ 20 , 000 ×

Or,     A 2 = $ 20 ,000 × 1.1872

∴        A 2 = $ 23,744

Hence From the calculation of both amount it is clear that , investment with interest rate 0.1872 is better . Answer

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