4. David, who plans to go to university in 4 years, estimates that he will need $40000. He is considering two investment options: Option A: 5.1% per year, compounded semi-annually Option B: 4.9% per year, compounded quarterly a) Determine the present value of each investment. b) Which option should David choose?

Intermediate Algebra
10th Edition
ISBN:9781285195728
Author:Jerome E. Kaufmann, Karen L. Schwitters
Publisher:Jerome E. Kaufmann, Karen L. Schwitters
Chapter11: Exponential And Logarithmic Functions
Section11.2: Applications Of Exponential Functions
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4. David, who plans to go to university in 4 years, estimates that he will need $40000. He is
considering two investment options:
Option A: 5.1% per year, compounded semi-annually
Option B: 4.9% per year, compounded quarterly
a) Determine the present value of each investment.
b) Which option should David choose?
Transcribed Image Text:4. David, who plans to go to university in 4 years, estimates that he will need $40000. He is considering two investment options: Option A: 5.1% per year, compounded semi-annually Option B: 4.9% per year, compounded quarterly a) Determine the present value of each investment. b) Which option should David choose?
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