Question

PLEASE HELP 4) Moira plans to deposit $1000 into a bank account and leave it in the bank to gather interest for 5 years. She

researches the interest rates at two banks. Her findings are in the table below.
Bank A
interest rate: 4%
compounded monthly
A = P (1+r/n)nt^
Bank B
interest rate: 4%
compounded continuously
A = Pe^rt

Compute the amount of money that Moira would have in each bank after 5 years. Which bank should Moira
Choose and why?

Answer 1

Compounded continuously $221.40 Compounded monthly $221.00 Moira should pick bank B with a total of $1221.40 - Moira will earn more with Bank B.