# Compounded Interest

1. Nov 6, 2013

### imull

1. The problem statement, all variables and given/known data
Assume that you can earn 6% on an investment, compounded daily. Which of the following options would yield the greatest balance after 8 years?
-$20,000 now -$30,000 after 8 years
-$8000 now and$20,000 after 4 years
-$9000 now,$9000 after 4 years, and $9000 after 8 years 2. Relevant equations A=P(1+r/n)^n 3. The attempt at a solution I understand how to use the equation, where P is the investment, r is the interest rate, and n is the number of times interest is compounded, but I don't understand the last three choices. What does it mean by "$9000 now, $9000 after 4 years, and$9000 after 8 years"?

2. Nov 6, 2013

### Staff: Mentor

You invest $9000 now, you invest another$9000 four years from now, and you invest another \$9000 eight years from now.

3. Nov 6, 2013

### imull

Okay. I was sort of thinking that, but I wanted to be completely sure. Many thanks!