Question 1158168

. COLLEGE SAVINGS Shannon is choosing between two different savings accounts to
keep her college fund in. The first account compounds interest semiannually at a rate of
11.0%. The second account compounds interest continuously at a rate of 10.8%. If
Shannon plans to keep her money in the account for 5 years, which account should she
choose? Explain.
<pre>YIELD, based on semi-annual compounding: {{{highlight_green(matrix(1,7, (1 + .11/2)^(2 * 5) - 1, "=", 1.708144458 - 1, "=", .708, or, "70.8%"))}}}
YIELD, based on continuous compounding: {{{highlight_green(matrix(1,7, e^(.108 * 5) - 1, "=", 1.716006862 - 1, "=", .716, or, "71.6%"))}}}
Can you now decide and explain your choice? You need to, because I will not!!