Which investment is better and by how much?
1- You deposit 1 penny at the end of the first month and you double it every month thereafter for 18 months. You are paid 6% interest compounded monthly.
2-You deposit $16.75 at the end of the first month and you increase it by exactly the same amount every month thereafter{i.e., $16.75, $33.50, $50.25....etc.}, for 18 months. You are paid 6% interest compounded monthly.
Thanks for any help.
1-The first investment would be worth=$2,634.60 after 18 months @ 6% comp. monthly.
2-The second investment would be worth=$2,632.39 after 18 months @ 6% comp.monthly.
So, the difference between the two is almost negligible, or: $2,634.60 - $2,632.39=$2.21.
P.S. The formulas I used should be in your textbook. If you have any questions, just let us know.
