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David has £5000 that he wishes to save for six years. Bank A offers him an interest rate of 4% per annum compounded monthly. Bank B offers him an interest rate of 3.95% per annum compounded continuously. (a) Determine how much David would have in each bank after six years.
(b) Which Bank would give David the most interest? How much more interest?
This problem refers to Doughtery's Educational Attainment and Earnings Functions (EAEF) data set, accessible through the course website. This data is a subset of the U.S. National
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