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Jing, a recent engineering graduate, never took engineering economics. When she graduated, she was hired by...

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?

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Answer #1

Meaning of Continuous Compounding : in this method interest is charged daily on outstanding balance.

Monthly Compounding : In this method interest is given on monthly basis.

continuous compounding   give the more interest compare to monthly compounding so this is better to invest in daily compounding.

It means Jing is taken a right decision.

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