14. Assume Julian has a choice between two deposit accounts. Account A has an annual percentage rate of 7.55 percent but with interest compounded monthly. Account B has an annual percentage rate of 7.45 percent with interest compounded continuously. Which account provides the highest effective annual return? (Please calculate the arithmetic solution and show your work)

Question

Reiny · Accepted Answer

first account: i = .0755/12 = .006291666.. amount of $1 = 1(1.006291666)^12 = 1.078168 second account: amount of $1 = 1 e^(.0745) = 1.07734 What do you think?

Anonymous · Answer

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