Question 20 1 pts You are planning to invest a sum of AU$20,000 in either in Ban

Question

Question 20 1 pts You are planning to invest a sum of AU$20,000 in either in Bank A or Bank B. Both Bank A and Bank B offer ex interest rate. However, compounding of interest at Bank A happens on a quarterly basis whereas compounding of interest at Bank B happens on a daily basis. actly the same If the money is kept in the bank for five (5) years, which bank wllgive you a larger sum at the end of five (5) years? Bank A There is not enough information to answer this question. Bank B Both banks will groe exacty same amount of money after ive years

Explanation / Answer

Bank B

Higher the compounding frequency greater is the future value accumulated over the five years

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