Question

One bank advertises a nominal rate of 5.81% compounded semiannually. A second bank advertises a nominal rate of 5.72% compounded weekly. What are the effective yields? (Round your answers to two decimal places.)

first bank | % | |

second bank | % |

In which bank would you deposit your money?

first banksecond bank

Answer #1

1. If a bank advertises a savings account that pays a 6% nominal
interest rate compounded continuously, what is the effective annual
percentage rate?
2. Bank A offers a nominal annual interest rate of 5% compounded
daily, while Bank B offers continuous compounding at a 4.6% nominal
annual rate. If you deposit $3,000 with each bank, what will be the
difference in the two bank account balances after two years?
(Show ALL work and formulas used!)

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...

Which bank has the best effective annual yield?
A) Badger Bank with a nominal rate of 6.4% compounded
monthly.
B) Wolverine Bank with a nominal rate of 6.34% compounded
weekly.
C) Catamount Bank with a nominal rate of 6.55% compounded
yearly.

First Bank of Midesto Medeque pays a 8.14% nominal rate of
interest compounded weekly. What is the effective rate of interest?
Enter your answer as a percentage without the % sign (e.g., enter
1.25% as 1.25). (use formula Step-by-Step NOT excel)

You are currently investing your money in a bank account that
has a nominal annual rate of 3.5 percent, compounded
monthly. How many
years will it take for you to double your
money? Please keep two decimal places and make sure you round
up/down correctly to two decimal places.

Quantitative Problem: Bank 1 lends funds at a nominal rate of
10% with payments to be made semiannually. Bank 2 requires payments
to be made quarterly. If Bank 2 would like to charge the same
effective annual rate as Bank 1, what nominal interest rate will
they charge their customers? Round your answer to three decimal
places. Do not round intermediate calculations.

you
are considering an investment that has a nominal annual interest
rate of 7.88percent compounded semiannually .therefore the
effective annual rate or EAR (anual percentage yield)is....

3) The Rob U Blind Bank advertises capital savings at 7.128%
compounded semi-annually while Take Your Money Trust offers premium
savings at 7.1% compounded monthly. Suppose you have $4400.00 to
invest for two years.
a) Which deposit will earn more interest?
b) What is the difference in the amount of interest?

Bank A offers a nominal annual interest rate of 4% compounded
daily, while Bank B offers continuous compounding at a 3.4% nominal
annual rate. If you deposit $5,000 with each bank, what will be the
difference in the two bank account balances after 3 years?

What semiannually compounded rate and effective rate of interest
are being charged on a $12,000 loan if semiannual payments of
$1204.55 will repay the loan in seven years? (Do not round
intermediate calculations and round your final answer to 2 decimal
places.)
j = % compounded semiannually
f = % effective rate

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