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1 March, 11:19

You have $6,600 to deposit. Regency Bank offers 12 percent per year compounded monthly (1.0 percent per month), while King Bank offers 12 percent but will only compound annually. How much will your investment be worth in 17 years at each bank

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  1. 1 March, 11:35
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    Instructions are below.

    Explanation:

    Giving the following information:

    Deposit = $6,600

    Regency Bank:

    12 percent per year compounded monthly (1.0 percent per month)

    King Bank:

    12 percent but will only compound annually.

    Number of years = 17

    To calculate the final value, we need to use the following formula for each bank:

    FV = PV * (1+i) ^n

    Regency Bank:

    n=17*12 = 204

    FV = 6,600 * (1.01^204)

    FV = $50,246.3

    King Bank:

    FV = 6,600 * (1.12^17)

    FV = $45,315.87
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