post the entire question please
Assuming that interest is compounded annually, what interest rate
would give the same total return after 6 years as Scheme 1?
how would i work this out, would appreciate any help!,
3. You have £5000 to invest but you have to choose between two different
schemes:
Scheme 1: pays a single payment after 6 years, equivalent to your initial
investment plus 30% of the initial investment.
Scheme 2: pays interest compounded annually at a rate of 4.2% per
annum.
a) Which scheme results in the largest return after 6 years? (6)
b) Assuming that interest is compounded annually, what interest rate
would give the same total return after 6 years as Scheme 1? (6)