You have $6,500 to deposit. Regency Bank offers 15 percent per year compounded m

Question

You have $6,500 to deposit. Regency Bank offers 15 percent per year compounded monthly (1.25 percent per month), while King Bank offers 15 percent but will only compound annually.

How much will your investment be worth in 18 years at each bank? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

How much will your investment be worth in 18 years at each bank? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

Explanation / Answer

18 years = 216 months

Amt in Regency Bank = 6500*(1.0125^216) = 95,113.08

Amt in King Bank = 6500*(1.15^18) = 80,440.45

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