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Yesterday, 19:15

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.)

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  1. Yesterday, 20:49
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    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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