Gregory may choose between two accounts in which to invest $5000. Account A offers 2.3% annual interest compounded monthly. Acco

Question

3 years ago

15

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

Mathematics

2 answers:

Aleksandr [31] · Answer 1 · 2022-09-16T03:21:49+03:00

Aleksandr [31]3 years ago

5 0

Answer:

Step-by-step explanation:

gladu [14] · Answer 2 · 2022-09-16T05:08:34+03:00

Answer:

see below

Step-by-step explanation:

principal = $5,000

interest rate = 2.3%

account A: compound monthly for 10 years

account B: compound continuously for 10 years

account A: compound monthly for 10 years

A = P (1 + r/12)^ r*t

= $5,000 (1 + .023/12)^ 12(10)

= $6,291.6

account B: compound continuously for 10 years

FVn = PV * e^r*t

= $5,000 * e ⁽⁰ ⁰²³ˣ¹⁰⁾

= $6,293

Gregory may chose account B. (but the difference is only $1.40)