Any bank offers two types of deposit accounts. On the one hand, 7.5% are offered nominal interest and interest calculated at the end of the year, but the other on the other hand, a nominal interest rate of 7.25% is calculated continuously. Suppose we are going to make a deposit a certain amount and keep it in an account one year. Which model should we choose if we want to maximize returns?
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
Any bank offers two types of deposit accounts. On the one hand, 7.5% are offered
nominal interest and interest calculated at the end of the year, but the other
on the other hand, a nominal interest rate of 7.25% is calculated continuously.
Suppose we are going to make a deposit a certain amount and keep it in an account one year. Which model should we choose if we want to maximize returns?
Nominal rate of interest is otherwise called as the compound interest.
Here rate of interest for 1 year is 7.5%
Compounded interest,
Where P be the initial amount,
A be the future value,
r be the rate of interest,
n be the number of times compounded in one year
t be time.
Here We are initially taken P=$1000
Given, r=7.5%=0.075
n=12 months
t=1 year
Step by step
Solved in 3 steps
