Answer:
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 [tex]\frac{2}{3}[/tex] % = [tex]\frac{56}{3}[/tex] %
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 × [tex](1 + \frac{Rate}{100})^{Time}[/tex]
Or, A 1 = $ 20 , 000 × [tex](1 + \frac{18.67}{100})^{1}[/tex]
Or, A 1 = $ 20 ,000 × 1.1867
∴ A 1 = $ 23,734
And A 2 = $ 20 , 000 × [tex](1 + \frac{18.72}{100})^{1}[/tex]
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
