Jane is having difficulty deciding whether to put her savings in the Mystic Bank or in the Four Rivers Bank. Mystic offers a 12% rate compounded quarterly, and Four Rivers offers 14% compounded semiannually. Jane has \$40,000 to invest and expects to withdraw the money at the end of five years. Using the tables in the Business Math Handbook that accompanies the course textbook, determine which one of the following is the best deal.

A. Mystic for last two years
B. Mystic
C. Four Rivers
D. Four Rivers for first two years

1. 👍 0
2. 👎 0
3. 👁 559
1. I don't have your handbook, but
all you have to do is to compare the equivalent annual rates of the two accounts.
No tables are needed

annual rate for 12% per annum compounded quarterly
= (1+.12/4)^4 = 1.1255% represents 12.55%

annual rate for 14% compounded semi-annually
= (1 + .14/2)^2 = 1.1449 represents 14.49%

so clearly C

choice A and D are mere distractors.

1. 👍 0
2. 👎 0
posted by Reiny

## Similar Questions

1. ### math

Farah, Kate and Jane have managed their savings well. The sum of Farah and Kate's savings is \$1548. Farah and Jane's savings sum up to \$1842. The ratio of Kate to Jane's savings is 4 : 7. How much has Farah saved?

asked by Anonymous on May 16, 2016
2. ### algebra

Mrs Lee was given \$1200 every month for the household expenses.She used 17/24 of it to buy food for the family, 5/7 of the remainder for clothes and other expenses.She put the remaining money into the bank as savings for the

asked by MTH on February 7, 2008
3. ### English

This is a men jacket A:men's*** B:Mens C:mens's The cat hid it kittens under the stairs A:its*** B:it's C:its' I opened an account at the Savings Bank Main Office A:Savings Banks B:Savings Bank's*** C:Savings Banks' Are these

asked by marylyn on July 26, 2017
4. ### Civics

Which best describes how the money that individuals have in savings accounts affects the economy? A. The money in savings accounts is used for daily expenses like food and gas which keep the economy going. B. The money in savings

asked by Student on April 17, 2015
5. ### Civics

Which best describes how the money that individuals have in savings accounts affects the economy? 1. The money in savings accounts is used for daily expenses like food and gas which keep the economy going. 2. The money in savings

asked by Student on April 17, 2015
6. ### Civics

Which best describes how the money that individuals have in savings accounts affects the economy? A. The money in savings accounts is used for daily expenses like food and gas which keep the economy going. B. The money in savings

asked by Student on April 16, 2015
7. ### math

I need help with these questions please. Could someone please check them for me? Thank You. 1. Jane Hilman went to her bank. She had a balance of \$1,009.88 in her savings account. She withdrew \$130.00 and the teller credited her

asked by Kimberly on January 26, 2010
8. ### Math

Mrs lee was given \$1200 every month for the household expenses . she used 17/24 of it to buy food for the family. 5/7 of the remainder for the clothes and other expenses. She put the remainder money into the bank as savings for

asked by . on June 27, 2019
9. ### English

1. I called at his house. 2. I visited his house. 3. I called on one of my friends. 4. I dropped by the bank to make a savings deposit. 5. I dropped by the bank to make a savings account. ======================== Are they all

asked by rfvv on December 4, 2015
10. ### mosinee

Jane Hilman went to her bank. She had a balance of \$1,009.88 in her savings account. She withdrew \$130.00 and the teller credited her account with \$6.19. What is her new balance?

asked by kay on April 23, 2012

More Similar Questions