Question
First National Bank pays 5.9% interest compounded semiannually. Second National Bank pays 6% interest, compounded monthly....
|
First National Bank pays 5.9% interest compounded semiannually. Second National Bank pays 6% interest, compounded monthly. |
| a. |
Calculate the future value for each dollar invested in First National (Assume you invest $1). (Do not round intermediate calculations. Round your answer to 5 decimal places.) |
| Future value | $ |
| b. |
Calculate the future value for each dollar invested in Second National (Assume you invest $1). (Do not round intermediate calculations. Round your answer to 5 decimal places.) |
| Future value | $ |
| c. | Which bank offers the higher effective annual rate? |
|
Homework Answers
Answer #1
The effective rate of interest of second national bank is more when compared to first national bank
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