The expressions in parts B and C are equivalent. Explain what this means in terms of Melanie’s situation.

Answer 1

If the expressions in parts B and C are equivalent, it means that the amount of money Melanie will have after two years is the same whether she invests $1000 at an interest rate of 8% compounded annually or if she invests $500 at an interest rate of 8% compounded semiannually for two years. This means that Melanie has two options that will result in the same outcome, and she can choose whichever option works best for her financial situation.