Kelsey has $5000 to invest and she is trying to decide between two banks. The second national bank is paying 3.5% interest compounded contin

Question

Kelsey has $5000 to invest and she is trying to decide between two banks. The second national bank is paying 3.5% interest compounded continuously. The third national bank is paying 3.8% interest compounded monthly. Find the amounts possible after 7 years at each bank. Which bank should Kelsey choose and why?

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Cora 2 weeks 2021-11-19T03:53:05+00:00 2 Answers 0 views 0

Answers ( )

    0
    2021-11-19T03:54:25+00:00

    Answer:

    Monthly Compounding

    Total = principal * (1 + rate / 12) ^ years * 12

    Total = 5,000 * (1 + (.038/12) )^84

    Total = 5,000 * 1.30418682

    Total = 6,520.93

    Continuous Compounding

    Total = principal * e ^ (rate * years)

    Total = 5,000 * 2.718281828459 ^ (.035 * 7)

    Total = 5,000 * 2.718281828459  ^ (0.245
    )

    Total = 5,000 * 1.2776213132

    Total =  6,388.11

    So, Kelsey should choose the monthly compounding bank.

    Step-by-step explanation:

    0
    2021-11-19T03:54:47+00:00

    Answer: 851.44

    Step-by-step explanation: try to do the math

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