EXERCISE 4 4. rates: Bank A pays interest on savings account at 4.5% compounded continuously, Bank B pays 4.75% on a savings account compounded monthly and Bank C pays 4.5% on a savings account compounded quarterly. Three banks in a town quote the following nominal interest а. Which bank pays its savers the lowest interest? APR = (1+)" -1 APR = e' - 1 Note, %3D m. %3D b. If you invest €10000 in Bank B, how long should it take to increase by 30%?

Ехample 6 A principal of 10,000 is invested at one of the following banks: a) at 4.75% interest, compounded annually b) at 4.7% interest, compounded semi-annually c) at 4.65% interest, compounded quarterly d) at 4.6% interest, compounded continuously Which is the best bank to lodge the money?

Bank 3 Liabilities (millions) 9. 17 Assets (millions) Maturities 1 day +1 day-3mos +3 mos-6 mos +6 mos-12 mos +l year- 5 years 6. 11 10 43 15 52 90 11 Use the Repricing Model. If interest rates rise by 56 basis points for assets and 142 basis points for liabilities over the next year, then how will impact the interest income of Bank 3 over the next year? O Bank 3 will experience a loss of $1,483,000 O Bank 3 will experience a gain of $679,400 Bank 3 will experience a loss of $679,400 Bank 3 will experience a gain of $1,953,400

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£ In a bank account that pays interest 8% p.a, what should you deposit now to have a balance of £2,000 a year from now? Enter an answer correct to 2 decimal places.

Problem #7: You deposit P dollars into an account that earns a nominal rate of i compounded semiannually. At the same time, you deposit 2.2P dollars into an account that earns simple interest at an annual rate of i. If both deposits earn the same amount of interest in the last 6 months of year 8, what is a Problem #7: Answer as a percentage, correct to 2 decimals.