If Free Yer Assets Bank (FYAB) will give you 0.25% compounded quarterly and I. M.A. Q.T.π bank will give you 0.23% interest compounded continuously, which is offering the better deal (Hint: Show how long it takes to double an investment).

Applying the interest formulas, it is found that due to the smaller doubling time, the FYAB bank is giving the better deal.

The amount of money is continuous compounding, with a interest rate of r, as a decimal, is given by:

Interest rate of 0.23%, thus .

The doubling time is t for which:

Hence:

Using continuous compounding, the doubling time is of 301.37 years.

Compound interest:

In this problem, 0.25% compounded quarterly, hence .

Due to the smaller doubling time, the FYAB bank is giving the better deal.

A similar problem is given at link

FYAB gives a better deal.

Step-by-step explanation:

Compound interest:

Continuously compounded interest:

For the quarterly compounded interest, r = 0.25%, and n = 4.

For the continuously compounded interest, r =0.23%

The quarterly compounded doubles in 277 years.

The continuously compounded doubles in 301 years.

FYAB gives a better deal.

f(x) is the value of the function. b is the value of the function when x equals zero or the y-coordinate of the point where the line crosses the y-axis in the coordinate plane.

step-by-step explanation:

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