Answer:
The correct answer is B. The rate of 7% compounded quarterly is better.
Step-by-step explanation:
In the case of investment at 7% compounded quarterly, the final result after 4 years of investment arises from the following calculation:
X = 7000 x (1 + 0.7 / 3) 4x3
X = 9,232.16
Therefore, after 4 years of investment, the amount in the account would be $ 9,232.16.
In turn, in the case of the investment at 6.85% compounded monthly, the final result after the same investment period arises from the following calculation:
X = 7000 x (1 + 0.685 / 12) 4x12
X = 9,199.33
Thus, in this case, the amount in the account after 4 years of investment would be $ 9,199.33.
