Samir is trying to decide between two checking account plans. After researching plans at two banks, he finds that Unity Bank offers a monthly compounded interest rate of 0.14%, while Sunrise Banking offers 1.6% interest compounded annually. Which is the better plan? Explain.(SHOW WORK)

Answer:The monthly compounded interest rate of 0.14% of Unity Bank is a better plan.Step-by-step explanation:Step 1 : Write the formula for calculating a monthly compound interest rate and for calculating an annually compounded interest rate.Monthly compound interest rate = P(1+r/n)^nxtn=12 (number of months in a year)t=1 (number of years)Annually compound interest rate = P(1+r/n)^nxtn=1 (because it is for 1 year only)t=1 (number of years=1)Step 2 : Lets assume that P is $100 in both banks and time is 1 year.Step 3 : Lets substitute the values to find out which one is better.Monthly compound interest rate = P(1+r/n)^nxtMonthly compound interest rate = 100(1+0.14/12)^12x1Monthly compound interest rate = 114.93114.93 - 100 = $14.93 per month14.93 x 12 = $179.16 for 12 months or 1 yearAnnually compound interest rate = P(1+r/n)^nxtAnnually compound interest rate = 100(1+1.6/1)^1x1Annually compound interest rate = 260260-100 = $160 for 1 yearTherefore, the monthly compounded interest rate of 0.14% of Unity Bank is a better plan.!!