Jennifer and Rex both receive a dividend fromtheir 401(k)
Chapter 4, Problem 4.19(choose chapter or problem)
Jennifer and Rex both receive a dividend fromtheir 401(k) retirement plan every 6 months. Theearning rates for this year have been 5% per year,compounded quarterly for Jennifer, and 4.85% peryear, compounded monthly for Rex. Rex felt goodabout this because he knew the monthly compoundingon his plan would make his APY higherthan Jennifers APY.(a) Is Rex correct? Explain your answer.(b) What is the effective rate for each plan on thebasis of the payment period?
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