Kellie has $9,000 to invest. A local bank offers a 30-month CD with an APR of 3.8% compounded monthly. What is the APY? (Round your answer to three decimal places.) % Mariah has $12,000 to invest. A local bank offers a 24-month CD with an APR of 3.8% compounded monthly. What is the APY? (Round your answer to three decimal places.) % Compare the APY results. Which of the following statements is true? Kellie's CD has a higher APY because her money is invested for a longer period of time than Mariah's. Mariah's CD has a higher APY because the amount of money she is investing is greater than Kellie's. Their CDs have the same APY because they have the same number of compoundings per year and the same APR. The amount invested and the time period of the investment don't matter because they aren't part of the APY formula.

Kellie has $9,000 to invest. A local bank offers a 30-month CD with an APR of 3.8% compounded monthly. What is the APY? (Round your answer to three decimal places.) % Mariah has $12,000 to invest. A local bank offers a 24-month CD with an APR of 3.8% compounded monthly. What is the APY? (Round your answer to three decimal places.) % Compare the APY results. Which of the following statements is true? Kellie's CD has a higher APY because her money is invested for a longer period of time than Mariah's. Mariah's CD has a higher APY because the amount of money she is investing is greater than Kellie's. Their CDs have the same APY because they have the same number of compoundings per year and the same APR. The amount invested and the time period of the investment don't matter because they aren't part of the APY formula.

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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Similar questions

Person A deposits $2750 in an account that pays 5% interest compounded once a year. Person B deposits $2200 in an account that pays 6% interest compounded monthly. Complete parts (a) through (c) below. a. Who will have more money in their account after one year? How much more? Select the correct choice below and fill in the answer box within your choice. (Round to the nearest dollar as needed.) O A. Person A will have $ 552 more than Person B. O B. Person B will have $ more than Person A. b. Who will have more money in their account after five years? How much more? Select the correct choice below and fill in the answer box within your choice. (Round to the nearest dollar as needed.) O A. Person B will have $ more than Person A. O B. Person A will have $ more than Person B.
Carol wants to invest money in an investment account paying 4% interest compounding semi-annually. Carol would like the account to have a balance of $56,000 three years from now. How much must Carol deposit to accomplish her goal? Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, and PVA of $1). Multiple Choice $28,000 $49,784 $49,726 $49,280
2. Remi deposits $2,000 into a savings account at her bank. If the interest rate is 3.25 percent, how much money will she have in her account after 5 years? 7. You are Co introductory rate months and the rate be entered into a drawin commercial. You pay $50 a you switch? Use the smart dec mathematically and include an em
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Someone needs to borrow $14,000 to buy a car and the person has determined that monthly payments of $300 are affordable. The bank offers a 3-year loan at 6% APR, a 4-year loan at 6.5%, or a 5-year loan at 7% APR. Which loan best meets the person's needs? Explain. Which loan best meets the person's needs? (Round to the nearest cent as needed.) O A. The second loan best meets the person's needs because the monthly payment of $ amount of $300 per month. OB. The third loan best meets the person's needs because the monthly payment of $ of $300 per month. OC. The first loan best meets the person's needs because the monthly payment of $ of $300 per month. OD. None of the loans meet the person's needs. is less than the maximum budgeted is less than the maximum budgeted amount is less than the maximum budgeted amount
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