As Customer Relationship Manager of a bank, one of your clients has asked for your advice concerning GH¢50,000 which she wishes to invest for five years. The two investment alternatives identified are to use a Bank Account where 24 percent per annum interest rate is compounded quarterly and a Savings Fund where the 36 percent per annum interest rate is compounded semi-annually. i. Calculate the size of the Bank Account and Savings Fund investments at the end of five years. ii. Calculate the effective annual interest rate of the Bank Account and Savings Fund investments
As Customer Relationship Manager of a bank, one of your clients has asked for your advice concerning GH¢50,000 which she wishes to invest for five years. The two investment alternatives identified are to use a Bank Account where 24 percent per annum interest rate is compounded quarterly and a Savings Fund where the 36 percent per annum interest rate is compounded semi-annually. i. Calculate the size of the Bank Account and Savings Fund investments at the end of five years. ii. Calculate the effective annual interest rate of the Bank Account and Savings Fund investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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As Customer Relationship Manager of a bank, one of your clients has asked for your advice concerning GH¢50,000 which she wishes to invest for five years. The two investment alternatives identified are to use a Bank Account where 24 percent per annum interest rate is compounded quarterly and a Savings Fund where the 36 percent per annum interest rate is compounded semi-annually.
i. Calculate the size of the Bank Account and Savings Fund investments at the end of five years.
ii. Calculate the effective annual interest rate of the Bank Account and Savings Fund investments
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