You have $6,700 to deposit. regency bank offers 9 percent per year compounded monthly (.75 percent per month), while king bank offers 9 percent but will only compound annually. how much will your investment be worth in 16 years at each bank?

Annual compound interest formula

The formula for annual compound interest is A = P (1 + r/n) ^ nt:

Where:

A = the future value of the investment/loan, including interest

P = the principal investment amount (the initial deposit or loan amount)

r = the annual interest rate (decimal)

n = the number of times that interest is compounded per year

t = the number of years the money is invested or borrowed for

Regency Bank

P = 6700. r = 9/100 = 0.09 (decimal). n = 1. t = 16.

A = 6700 (1 + 0.09 / 1) ^ 1 (16) = 26,601.05

So, the investment balance after 16 years is $26,601.05.

King Bank

P = 6700. r = 9/100 = 0.09 (decimal). n = 12. t = 16.

A = 6700 (1 + 0.0075 / 12) ^ 12 (16) = 28,127.12

So, the investment balance after 16 years is $ 28,127.12