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4. For liquidity purposes, a client keeps $100,000 in a bank account. The bank quotes a...

4. For liquidity purposes, a client keeps $100,000 in a bank account. The bank quotes a stated annual interest rate of 7 percent. The bank’s service representative explains that the stated rate is the rate one would earn if one were to cash out rather than invest the interest payments. How much will your client have in his account at the end of one year, assuming no additions or withdrawals, using the following types of compounding?

A. Quarterly.

B. Monthly.

C. Continuous.

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Expert Solution

jeff jeffy answered 2 years ago
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