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You have $7,800 to deposit. Regency Bank offers 6 percent per year compounded monthly (.5 percent per month), while King Bank offers 6 percent but will only compound annually. How much will your investment be worth in 19 years at each Bank? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Respuesta :

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Answer:

Instructions are listed below.

Explanation:

Giving the following information:

PV= $7,800

Regency Bank:

i= 0.5 percent per month

n= 19*12= 228

King Bank:

i= 6 percent annually

n=19

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

FV= PV*(1+i)^n

Regency bank:

FV= 7,800*(1+0.005)^228= $24,319.61

King bank:

FV= 7,800*(1.06)^19= $23,599.68

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