Question

25 POINTS IF ANSWERED #1 You have just inherited $5,000 from an old, incredibly rich (and smart) math teacher. However there is one condition. You have to decide whether to put the money in an account with 9% annual percentage rate compounded yearly or an account with 8 % annual rate compounded quarterly (4 times each year) Each account will be compounded for 5 years. Which account would give you more money after the 5 years? Justify. How much money will the 9% account give you after 5 years? * How much money will the 8% account give you after 5 years? *

Answer 1

8% account give you after 5 years? $13,000.
9% account give you after 5 years? $7,250.