Question

Name 5. A savings account that offers 2.18% compounded monthly: you can remove the money any time you like, but plan to keep it in the investment for 5 years. 6. A rival bank to the one in Question 5 offers the same interest rate, but they compound hourly. The plan is also to keep the money invested for 5 years. So how would you invest the money? Obviously, you have to discuss you reasoning. Think about the fact that when investing, there are other potential concerns than simply the total amount at the end of the investment 7.

Answer 1

Explaination is provided to first and others are briefly solved. Only one was to be solved. So please upvote if you have got your answer

"A) savings account that offers 2.188 compounded monthly you can remove the money any time, but plan to keep it in the investment for 5 years Sol) For the problem we would consider principle amount(P) as $ 1000 .The interest rate offered is 2.18% It is compounded interest rate monthly Time for investment is 5 years Now, annual compound interest formula (including principle0 is A = 9(1+ r/n^nt Because A = amount P = principal r = rate of interest(decimal) t = times(years) n = no of times interest is compound in a year Therefore A = 1000 (1 + 0.0218/12)^12 times 5 Therefore A = 1000(1 + 0.001816)^60 Therefore A = 1000 (1.1150) Therefore A = 1115.00 will be final amount received at the end of 5 years. Note ""(1) According to(hegg's experts 'policy I'm only allowed to solve first full question or first is sub question if there are more than one asked (2) Hence, only problem (5)^in is solved but with full explanation (3) If you find any difficulty for the same please do ask in the comments section. "