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26 June, 18:47

Shannon is choosing between two different saving account for her college fund the first account compounds interest semiannually at a rate of 11.0%. The second account compounds interest continuously at a rate of 10.8%. If Shannon plans to keep her money in the account for 5 years which account should she choose? Explain

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  1. 26 June, 20:41
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    100 * (1+0.11:2) ^ (2*5)

    =170.81

    100*e^ (0.108*5)

    =171.60

    So she should choose the account which pays the interest continuously
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