On its savings accounts, the First National Bank offers a 5 percent nominalinterest rate that is compounded monthly. Savings accounts at the SecondNational Bank have the same effective annual return, but interest is compoundedquarterly. What nominal rate does the Second National Bank offer on its savingsaccounts?a. 5.12%b. 5.00%c. 5.02%d. 1.28%e. 5.22%

In compounding there is interest on interest and due to which the effective rate is more than the…

On its savings accounts, the First National Bank offers a 5 perce interest rate that is compounded monthly. Savings accounts at t National Bank have the same effective annual return, but interest is co quarterly. What nominal rate does the Second National Bank offer on accounts? a. 5.12% b. 5.00% c. 5.02%

On its savings accounts, the First National Bank offers a 5 perce interest rate that is compounded monthly. Savings accounts at t National Bank have the same effective annual return, but interest is co quarterly. What nominal rate does the Second National Bank offer on accounts? a. 5.12% b. 5.00% c. 5.02%

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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When $8,600 is invested in a savings account paying simple interest for the year, the interest, i in dollars, can obtained from the equation i=8,600r, where r is the rate of interest in decimal form. Graph i=8,600r, for r up to including a rate of 16%. If the rate is 7%, how much interest is earned? OA. $6,020 OB. $602 O C. $586 OD. $622 I
24) One of the local banks indicates that it computes the interest it pays on savings accounts by the continuous compounding method. Suppose you deposited $100 in the bank and they pay 4% per annum, compounded continuously. After 5 years, how much money will there be in the account? Select one: a. $ 122.14 b. $ 144.14 c. $ 322.14 d. $ 222.14 25) At 10% per year simple interest, how long will it take for a deposit of $1000 now to accumulate to $100,000? Select one: a. n=99 years b. n=50 years c. n=44 years d. n= 990 years 26) When only one alternative can be selected from two or more, the alternatives are said to be: Select one: a. subjective alternatives b. independent alternatives c. revenue alternatives d. mutually exclusive
Michael have regular savings account with an available balance 5,000.00. How much net interest is earned by this deposit account for a month of the prevailing bank's interest rate is 0.5% per annum and the withholding tax is 20%.
A bank bill with a face value of $100,000 was issued today and it matures in 60 days' time. If interest rates are 6% p.a. what amount of interest is earned if the bill is held until maturity? a. $99,023.33 b. $1,457.88 C. $976.67 Od. $6,000.00 Oe. $78,260.87
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Southern Bank offers 10% interest and interest is compounded annually. West Bank offers 9% interest and interest is compounded on monthly basis. Both banks return principal and interest at the end of five years. Which one of the two banks you would prefer to deposit your savings? A) Southern Bank B) Western Bank C) Both are equal and hence indifferent D) None of the above.
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