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April 23, 2014

April 23, 2014

Posted by **Justin** on Wednesday, April 25, 2012 at 12:34pm.

- College Algebra -
**Henry**, Friday, April 27, 2012 at 5:00pmBank A: Pt = Po(1+r)^n.

r = 5.7%/100% = 0.057 = APR expressed as a decimal.

n 1comp/yr * 1yr = 1 compounding period.

Pt = 1(1.057)^1 = 1.057.

Bank B: Pt = Po(1+r)^n.

r = (5.6%/12) / 100% = 0.00467 = Monthly % rate expressed as a decimal.

n = 1comp/mo * 12mo = 12 Compounding

periods.

Pt = 1(1.00467)^12 = 1.058.

Bank C: Pt = Po(1+r)^n.

r = (5.65%/4) / 100% = 0.014125 = Quarterly % rate expressed as a decimal.

n = 4comp/yr * 1yr = 4 Compounding periods.

Pt = 1(1.014125)^4 = 1.058.

The amt. charged by each bank is approximately the same.

Note: All calculations were done with the assumption that $1.00 was borrowed from each bank for a period of one year.

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