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1 answer:
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Answer:
a. $ 381.969,
b. $ 369.171,
c. Kings Savings
d. Reliability.
Step-by-step explanation:
∵ Amount formula in compound interest,
And, amount formula in continuously,
,
Where,
P = principal amount,
r = rate per periods,
t = number of periods,
a. In State bank,
P = $ 9000, r = 2.1% = 0.021, t = 2 years,
Also, interest earned compound annually,
Thus, amount,
So, interest earned = A - P = 9381.969 - 9000 = $ 381.969,
b. In Kings Savings,
P = $ 9000, r = 2.01% = 0.0201, t = 2 years,
Also, interest earned compound continuously,
Thus, amount,
So, interest earned = A - P = 9369.171 - 9000 = $ 369.171,
c. ∵ 369.171 > 381.969
Thus, King saving pays higher interest.
d. Since, the other factors might affect Whitney's choice besides interest would be reliability.