A man has $5000 on deposit in a bank that pays 5% interest compounded annually. He wonders

Question:

A man has $5000 on deposit in a bank that pays 5% interest compounded annually. He wonders how much more advantageous it would be to transfer his funds to another bank whose dividend policy is 5% interest, compounded continuously. Compute how much he would have in his savings account at the end of 3 years under each of these situations.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...