The interest was compounded continuously

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Reference no: EM131012250

Shawna just turned 21 and currently has no investments. She plans to invest $5,500 at the end of each of the next 8 years, starting with her 22nd birthday. The rate of return on her investment is 4% per year, compounded monthly. (Please show how you arrive at answer)

a) What will be the balance in her investment account when she makes the last of the 8 payments?

b) What will be the balance if the interest was compounded continuously?

c) Suppose she has an alternative investment but with similar risk, that can produce a return of 4.2%, compounded annually. Which investment plan should she select?

Reference no: EM131012250

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