question 9 / 10\naaron wants to open a savings account. which account will grow his money the most?\na…

question 9 / 10\naaron wants to open a savings account. which account will grow his money the most?\na. account 1: interest rate 2%, interest compounded daily.\nb. account 2: interest rate 1%, interest compounded daily.\nc. account 3: interest rate 2%, interest compounded monthly.\nd. account 4: interest rate 1%, interest compounded annually.

question 9 / 10\naaron wants to open a savings account. which account will grow his money the most?\na. account 1: interest rate 2%, interest compounded daily.\nb. account 2: interest rate 1%, interest compounded daily.\nc. account 3: interest rate 2%, interest compounded monthly.\nd. account 4: interest rate 1%, interest compounded annually.

Answer

Explanation:

Step1: Recall compound - interest concept

The more the interest rate and the more frequent the compounding, the more the money will grow.

Step2: Compare interest rates

Account 1 and Account 3 have a 2% interest rate, while Account 2 and Account 4 have a 1% interest rate. So we can eliminate Account 2 and Account 4.

Step3: Compare compounding frequencies

Account 1 has daily compounding and Account 3 has monthly compounding. Since daily compounding is more frequent than monthly compounding, the money in Account 1 will grow more.

Answer:

A. Account 1: Interest rate 2%, interest compounded daily.