Bank ABC offers a 10-year CD that pays a 5% interest compounded annually. Bank XYZ also...
Bank XYZ also offers a 10-year CD that pays 4.879% interest compounded daily.
How much would a $1,000 initial investment in each bank's CD be worth at maturity?
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Bank ABC offers a 10-year CD that pays a 5% interest compounded
annually.
Bank XYZ also...
Two banks offer a 10-year CD. Bank A's CD offers 5% yield with monthly compounding; while...
Two banks offer a 10-year CD. Bank A's CD offers 5% yield with monthly compounding; while Bank B's CD offers 4.879% yield with daily compounding. Assume you're considering investing $5,000 in a CD. Which of the following is TRUE? Bank B's CD is preferable since it has a more frequent compounding period. Bank A's CD is preferable since it has a higher yield. At maturity, a $5,000 CD from both banks would be worth the same. At maturity, the CD...
3) Effective versus nominal interest rates. Bank A pays 4% interest compounded annually on deposits, Bank...
3) Effective versus nominal interest rates. Bank A pays 4% interest compounded annually on deposits, Bank B pays 3.75% compounded semiannually, and Bank C pays 3.5% compounded daily. a) Which bank would you use? Why? b) If you deposited $5,000 in each bank today, how much would you have at the end of 2 years? c) What nominal rate would cause Banks B and C to provide the same effective annual rate as Bank A? d) Suppose you do not...
Question 1 (0.2 points) Last national bank offers a CD paying 8% interest (compounded annually. If...
Question 1 (0.2 points) Last national bank offers a CD paying 8% interest (compounded annually. If you invest $1000 how much will you have in $ at the end of year 8. Your Answer: Answer
Dixie Bank offers a certificate of deposit with an option to select your own investment period....
Dixie Bank offers a certificate of deposit with an option to select your own investment period. Jonathan has $7,000 for his CD investment. If the bank is offering a 6% interest rate, compounded annually, how much will the CD be worth at maturity if Jonathan picks a two year investment period? a five-year investment period? a eight-year investment period? a fifteen year year investment period? a. How much will the $7,000 CD investment at 6% interest rate be worth at...
The bank offers interest rate of 5.26%, compounded semi-annually. If you put $10 in the bank...
The bank offers interest rate of 5.26%, compounded semi-annually. If you put $10 in the bank now, how much money do you have at the end of one year? (Round to the nearest cent.)
Round to the nearest cent Future value (with changing years). Dixie Bank offers a certificate of...
Round to the nearest cent
Future value (with changing years). Dixie Bank offers a certificate of deposit with an option to select your own investment period. Jonathan has $5,000 for his CD investment. If the bank is offering a 6% interest rate, compounded annually, how much will the CD be worth at maturity if Jonathan picks a a. three-year investment period? b. five-year investment period? c. ten-year investment period? d. twenty-year investment period?
eBook Bank A pays 7% interest compounded annually on deposits, while Bank B pays 6.5% compounded...
eBook Bank A pays 7% interest compounded annually on deposits, while Bank B pays 6.5% compounded daily. a. Based on the EAR (or EFF%), which bank should you use? b. Could your choice of banks be influenced by the fact that you might want to withdraw your funds during the year as opposed to at the end of the year? Assume that your funds must be left on deposit during an entire compounding period in order to receive any interest
Suppose you have $2,000 and plan to purchase a 10-year certificate of deposit (CD) that pays 11.4% interest, compounded...
Suppose you have $2,000 and plan to purchase a 10-year certificate of deposit (CD) that pays 11.4% interest, compounded annually. How much will you have when the CD matures? $6,063.44 $5,886.84 $5,357.02 $7,299.68 $6,769.86
5) Archaic Bank only offers Simple Interest Accounts at 2%. If you opened an account with...
5) Archaic Bank only offers Simple Interest Accounts at 2%. If you opened an account with $1000, how much would be in your account after 5 years? 6) You open an account at another bank paying compound interest. If you put $1000 in the account and the interest rate is 2%, how much will you have after 5 years if the money is a) Compounded annually b) Compounded quarterly 7) You found an old baseball card that increasing in value...
Universal Bank pays 6% Interest, compounded annually, on time deposits. Regional Bank pays 5% interest, compounded...
Universal Bank pays 6% Interest, compounded annually, on time deposits. Regional Bank pays 5% interest, compounded quarterly a. Based on effective interest rates, in which bank would you prefer to deposit your money? 1. You would choose Regional Bank because its EAR (or EFF%) is higher. II. You would choose Regional Bank because its nominal interest rate is higher. TIL. You are indifferent between the banks and your decision will be based upon which one offers you a int for...
Two banks offer a 10-year CD. Bank A's CD offers 5% yield with monthly compounding; while Bank B's CD offers 4.879% yield with daily compounding. Assume you're considering investing $5,000 in a CD. Which of the following is TRUE? Bank B's CD is preferable since it has a more frequent compounding period. Bank A's CD is preferable since it has a higher yield. At maturity, a $5,000 CD from both banks would be worth the same. At maturity, the CD...
3) Effective versus nominal interest rates. Bank A pays 4% interest compounded annually on deposits, Bank B pays 3.75% compounded semiannually, and Bank C pays 3.5% compounded daily. a) Which bank would you use? Why? b) If you deposited $5,000 in each bank today, how much would you have at the end of 2 years? c) What nominal rate would cause Banks B and C to provide the same effective annual rate as Bank A? d) Suppose you do not...
Question 1 (0.2 points) Last national bank offers a CD paying 8% interest (compounded annually. If you invest $1000 how much will you have in $ at the end of year 8. Your Answer: Answer
Round to the nearest cent
Future value (with changing years). Dixie Bank offers a certificate of deposit with an option to select your own investment period. Jonathan has $5,000 for his CD investment. If the bank is offering a 6% interest rate, compounded annually, how much will the CD be worth at maturity if Jonathan picks a a. three-year investment period? b. five-year investment period? c. ten-year investment period? d. twenty-year investment period?
5) Archaic Bank only offers Simple Interest Accounts at 2%. If you opened an account with $1000, how much would be in your account after 5 years? 6) You open an account at another bank paying compound interest. If you put $1000 in the account and the interest rate is 2%, how much will you have after 5 years if the money is a) Compounded annually b) Compounded quarterly 7) You found an old baseball card that increasing in value...
Universal Bank pays 6% Interest, compounded annually, on time deposits. Regional Bank pays 5% interest, compounded quarterly a. Based on effective interest rates, in which bank would you prefer to deposit your money? 1. You would choose Regional Bank because its EAR (or EFF%) is higher. II. You would choose Regional Bank because its nominal interest rate is higher. TIL. You are indifferent between the banks and your decision will be based upon which one offers you a int for...
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