Thread: Exponential Function and Compounded Decomposition problem

1. Exponential Function and Compounded Decomposition problem

Hi, I need some help with the following problem. Please let me know if I'm on the right track:

A student knows that she will need $3,500.00 five years from now. She must decide between Bank A, which offers 7% compounded weeekly, and Bank B which offers 6% compounded continuosly. Which Bank should she use? Bank A variables: Future value = 3,500 Annual rate = 0.07 m = 52.177 weeks in 1 year t = 5 years Is this correct so far? So we know everything except for present value P. 3500 = P(1+0.07/52.177)^(52.177*5) Present value =$2466.99 is this correct?

Bank B:

Future value = 3500
Annual rate = 0.06
t = 5 years

Once again we have to solve for Present value using the Exponential function e correct?

A = Pe^rt

3500=Pe^0.3
3500=P(1.349859)

Present value = \$2592.86 is this correct?

And the answer would be Bank A... Please let me know if i made any sense thank you!

2. is there something wrong with my answer? could someone please let me know if im on the right path