SOLUTION: Please help me solve this word problem: Suppose you have $11,000 to invest. Which of the two rates would yield the larger amount in 1 year: 12% compounded daily or 11.8% compounde

Question 831276: Please help me solve this word problem:
Suppose you have $11,000 to invest. Which of the two rates would yield the larger amount in 1 year: 12% compounded daily or 11.8% compounded continuously?
Answer by Elomeht(22) (Show Source): You can put this solution on YOUR website!
1. 12% compounded daily has a yearly accumulation factor of:
(1 + 0.12/365)^365 = 1.12747
2. 11.8% compounded continuously has a yearly accumulation factor of:
e^0.118 = 1.12524
3. The 12% compounded daily is clearly larger, so the larger amount in one year is: 11000 times 1.12747 = 12402.2

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