Question

Jing, a recent engineering graduate, never took engineering economics. When she graduated, she was hired by a prominent engineering firm. The earnings from this job allowed her to deposit $10000 each quarter into a savings account. Their way two banks that offer savings accounts in her town(a small town!).The first bank was offering 4.5% interest compounded continuously. The second bank offered 4.6%Compounded monthly. Jing decided to deposit in the first bank because it offered continuous compounding. Did she make the right decision?

Answer 1

Step-by-step explanation:

Since measuring the effective interest rate and effective interest rate of 4,6% multiplied per month, the effective rate was 4,6980 dollars annually, so she did not use the right option and preferred the lower rate because she was on a lower rate of return while she was a continual companion.

In this issue, the rate of interest has Adjusted and the interest rate paid for this monthly compound is higher than what the interest rate is offered. The rate of the continuous compounds is also higher than the rate of interest offered on the monthly compounding.