Gregory may choose between two accounts in which to invest $5000. Account A offers 2.3% annual interest compounded monthly. Acco
unt B offers continuous compound interest. Greg plans to leave his investment untouched (no further deposits and no withdrawals) for 10 years.
need help calculating account b's balance
need help calculating account b's balance
1 answer:
Answer:
<h2>Gregory should take the continuos compound interest.</h2>Step-by-step explanation:
If we calculate the Amount with both type of interest, we have:
Annual interest compounded monthly:
This means that with this interest, after 10 years he will get $6,291.61.
Continuous compound interest:
Meaning that Gregory will get 6,293.
As you can see, it's not a big difference, only $2 more, but it's still better.
<em>(Image attached are formulas with the variables meanings)</em>
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ln(2/3 <em>x</em> ¹ʹ³) = 3
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