GRE Question of the Day (May 10th)

Math

If P dollars borrowed or invested for for \({t}\) years at the interest rate \({r}\) compounded \({n}\) times per year, then the future value (a) will be \({A=P(1+\frac{{r}}{{n}})^{nt}}\)

Two individuals, M and N invested P dollars with the following conditions and both gained the same future value at the end of the investment period:

M invested $P at the interest rate \({\frac{{r-5}}{{100}}}\) for 6 years compounded 4 times per year

N invested $P at the interest rate \({\frac{{r+5}}{{100}}}\) for 4 years compounded 6 times per year

A)The quantity in Column A is greater.
B)The quantity in Column B is greater.
C)The two quantities are equal.
D)The relationship cannot be determined from the information given.

Correct Answer - C  - (click and drag your mouse to see the answer)

Question Discussion & Explanation