1.A company can choose one of two investment plans, A and B. Under plan A, it...

1.A company can choose one of two investment plans, A and B. Under plan A, it can invest $117604 at 6.7% p.a., compounded monthly. Under plan B, it can invest $x at 6.2% p.a., compounded continuously. If the company wants to have the same amount after two years using either plan, what is the value of x ?

(Give your answer correct to two decimal places.)

2.What is the extra amount of interest earned, if $3516 is invested for six years at 5.2% p.a. compounded monthly rather than for six years at 5.2% p.a. simple interest ?

(Give your answer to the nearest cent, omitting the dollar sign.)

Expert Solution

In the first part of question we need to calculate the pricipal amount i.e x if the compounded value will remain same as in PLAN A. for that we will calculate compounded value as per plan A and use the same value for calculating x in Plan B.

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now for the second part of question we will calculate compound interest and simple interest and find out the difference between two

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ekkarill92 answered 1 year ago

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