Ursula Vanov can invest $5,000 in a 1-year CD at 3% compounded monthly or a 1-year CD compounded daily. Determine the amount at
maturity of each investment. What is the difference in the amounts?
1 answer:
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Answer:
First equation is -425
Second equation is 11.25
Step-by-step explanation:
First equation we can write as
computing
When i=0 ->
When i=1 ->
...
When i=7 ->
then replacing each term we have
For the second equation we'll have 9 terms, solving in a similar fashion
When i=1 ->
When i=2 ->
When i=3 ->
...
When i=9 ->
So we have 0.25 + 0.50 + 0.75 + 1.00 + 1.25 + 1.50+ 1.75 +2.00 +2.25