1 Answer | Add Yours
Let the number of years after which the investment of Harpreet and Len will be the same be N.
As Len invested $5200 at 6% p.a. simple interest, after N years it is worth 5200(1 + N*0.06)
Harpreet invested $3600 at 6% p.a. compounded quarterly, after N years it increases to 3600*(1.015)^(4*N)
Equating the two and solving for N
5200(1 + N*0.06) = 3600*(1.015)^(4*N)
The equation can only be solved using trial and error. Using the same, the value of the right hand side is more than the left hand side after 19 years.
Harpreet's investment is worth more than Len's after 19 years.
We’ve answered 315,806 questions. We can answer yours, too.Ask a question