Thread: Exponential word problem

Use the formula, , to answer the following questions.

A bank offers you two options for investing 5000. Option 1 offers 3.6% interest, compunded yearly. Option 2 offers 3.4% interest compunded monthly. You will invest your money for 4 years.

a. Which option offers the better deal?
I'm really going to try and make some sense but I really cannot understand yet how to correctly use the formula.
Since I have been using logs in class, does it have something to do with logs if so can I be guided in that direction?

b. How much more money will you earn by choosing that option?