Solve the problem.
-Which of the following investments is larger after 20 years?
A) $\$ 1250$ is deposited annually and earns $4 \%$ interest compounded annually.
B) $\$ 100$ is deposited monthly and earns $4 \%$ interest compounded monthly.

Question

Quizplus · Accepted Answer

The future value of an annuity formula shows that option A, with larger annual deposits, will accumulate more over 20 years compared to smaller monthly deposits in option B, even though both have the same interest rate.

Solve the Problem $1250\$ 1250$1250 Is Deposited Annually and Earns 4%4 \%4%

Solve the Problem $\$ 1250$ Is Deposited Annually and Earns $4 \%$