After a number of years of saving up all your pennies you have finally reached a total amount of $6,000. Instead of using your savings to travel, purchase the newest technologies on the market, or using this money for your daily expenses you have decided to put your money into a savings account. After an extensive amount of research you have the following options to choose from: Bank 1 offers an 8% annual interest rate. Bank 2 offers a 7% annual interest rate compounded quarterly. Bank 3 offers a 7% annual interest rate compounded monthly. Bank 4 offers a 5% annual interest rate. 1.Decide which bank you consider to be the best option to open a savings account for one year. Justify your answer. 2.After, decide which bank will be the best option to open a savings account long term. Create a proposal as to why the bank you selected is the best option.

Investors shall open a savings account in such a bank that will pay more interest rates on an…

Answered: After a number of years of saving up…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter4: Managing Your Cash And Savings

Section: Chapter Questions

Problem 7FPE: Calculating interest earned and future value of savings account. If you put 6,000 in a savings...

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After a number of years of saving up all your pennies you have finally reached a total amount of $6,000. Instead of using your savings to travel, purchase the newest technologies on the market, or using this money for your daily expenses you have decided to put your money into a savings account.

After an extensive amount of research you have the following options to choose from:

Bank 1 offers an 8% annual interest rate.

Bank 2 offers a 7% annual interest rate compounded quarterly.

Bank 3 offers a 7% annual interest rate compounded monthly.

Bank 4 offers a 5% annual interest rate.

1.Decide which bank you consider to be the best option to open a savings account for one year. Justify your answer.

2.After, decide which bank will be the best option to open a savings account long term. Create a proposal as to why the bank you selected is the best option.

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