Bank America offers a stated annual interest rate of 5.0 percent, compounded quarterly, while Bank USA offers a stated annual interest rate of 5.10 percent, compounded monthly. In which bank should you deposit your money?

Q: A credit card company compounds monthly and charges an interest of 1 ½ % per month. What is the…

A: Effective Interest Rate It is a rate that discounts the approximate future cash flows over the…

Q: Your monthly statement from your bank credit card shows that the monthly rate of interest is 1.5%.…

A: Given details are : Monthly rate of interest = 1.5% We require to compute the annual effective rate…

Q: A bank pays 4% nominal annual interest on special three-year certificates. What is the effective…

A: Effective Annual Rate is a modified rate of return where it considers the compounding effect.…

Q: A bank offers a loan that will require you to pay 9% per annum with semi-annual compounding. Which…

A: Given rate,  9% semi annual compounding

Q: If you deposited P1,000 a couple of years ago in a bank that pays the interest bimonthly. After…

A: The effective rate implies for percentage figure which shows proportion of increase that will occur…

Q: A bank charges 1 ½% per month on the unpaid balance for purchases made with its credit card. This is…

A: The equivalent effective annual rate can be calculated through the compounding interest formula. The…

Q: how much will have tobe deposited to earn 225 pesos of interest

A: Simple Interest: It is the easiest method to compute interest expense/charge on the loan taken.…

Q: Suppose you have received a credit card offerfrom a bank that charges interest at 1.4% per…

A: Working note:

Q: A bank offers a rate of 2.3% compounded semiannually on its four-year GICS. What monthly and…

A: a) Effective rate = (1+r/m)^m -1 Where, r = rate of interest i.e. 2.30% or 0.023 m = no. of…

Q: Bank A pays 10% interest compounded annually on deposits, while Bank B pays 9% compounded daily.…

A: Bank A interest = 10% annually compounded Bank B interest = 9% daily compounded (365 days of…

Q: Assuming a 360-day year, the interest charged by the bank, at the rate of 7%, on a 90-day,…

A: Given that: Note payable = $124800 Interest rate = 7% Period = 90 days

Q: A bank CD that pays 7.11 percent compounded semiannually. Calculate the effective annual interest…

A: In this question we need to compute the effective annual rate (EAR)

Q: a bank charges one and one-half percent per month on the unpaid balance for purchases made its…

A: Present value is the sum of the current value of money of future cash flows. It is also known as a…

Q: Bank A offers a nominal annual interest rate of 5% compounded daily, while Bank B offers continuous…

A: Here, Bank A: Annual Interest rate = 5%  No. of Compounding Periods = 365 days Present value of…

Q: Bank of Vancouver pays 7 percent simple interest on its savings account balances, whereas Bank of…

A: Simple interest is an ordinary interest payble at equal amount over specified period over principal…

Q: Bank America offers a stated annual interest rate of 5.0 percent, compounded quarterly, while Bank…

A: Bank America = 5% interest Bank USA= 5.10% interest Assume Present value $100

Q: Bank A pays 5% interest compounded annually on deposits, while Bank B pays 4.8% compounded monthly.…

A: Effective annual rate(EAR) is the rate that is actually earned or paid on investment or loan. It…

Q: It is now January 1, 20x8. Today you will deposit P100,000 into a savings account that pays 8%. a.…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: A- A person deposited $40,000 at a bank at an interest rate of 16% compounded quarterly. Find the…

A: Deposited amount= $40,000 Interest rate (r)= 16% Compounding Frequency (n)= quarterly Effective Rate…

Q: A bank offers the following interest rates on your deposit: (Draw the Cashflow) 10% per year,…

A: The effective annual rate (EAR) is the actual rate of interest after taking the compounding effect…

Q: Your bank offers 3 percent annual interest onsavings deposits. If you deposit $560 today, howmuch…

A: Time value of money: Time value of money refers to the concept that the value of money available at…

Q: A bank pays a stated annual interest rate of 8 percent. What is the effective annual rate using the…

A: In the given question we require to compute the effective annual rate if annual interest rate is 8%.

Q: A bank promises to pay an interest rate of 13.9 percent compounded quarterly. What is the effective…

A: Using excel effective rate formula

Q: A bank offers 6.00% on savings accounts. What is the effective annual rate if interest is compounded…

A: The effective annual rate of interest is the real return on the savings account when the effects of…

Q: A bank pays 6% interest, compounded semiannuall formula to find how much should be deposited (in $…

A: Given, Interest rate = 6% or 0.06 Annual payment (A) = $700 Number of years = 16 years

Q: Find the equivalent present worth of the cash receipts in the accompanying diagram, where i = 8%…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: 4- Bank America offers a stated annual interest rate of 5.0 percent, compounded quarterly, while…

A: To understand in which bank you should deposit your money, we need to calculate Effective interest…

Q: A certificate of deposit (CD) is an agreement between a bank and a saver in which the bank…

A: formula for annual yield: AY=1+rnn-1where,r =rate n =frequency of compounding

Q: Bank A pays 8% interest, compounded quarterly, on its money market account. The managers of Bank B…

A: The effective annual rate takes into consideration the compounding effect and fees charged. It is…

Q: A bank pays a stated annual interest rate of 8 percent. What is the effective annual rate using the…

A: We require to compute the Effective annual rate in this question using monthly compounding.

Q: Assuming a 360-day year, the interest charged by the bank, at the rate of 12%, on a 90-day,…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: A bank pays interest quarterly with an EAR of 7%. What is the periodic interest rate applicable per…

A: Interest rate can be of two different types. 1. Effective annual Interest 2. Nominal Annual…

Q: The bank is offering to the public their savings account scheme that pays 9.84% compounded annually.…

A: Annual rate (r) = 9.84% compounded annually Let the quarterly compounded rate = i Number of…

Q: Elliott Credit Corp. wants to earn an effective annual return on its consumer loans of 14.5 percent…

A: The formula used as follows: APR=m×1+EAR1m-1

Q: San Juan Rural Bank is offering to the public their savings account scheme that pays 9.84%…

A: Interest rate = 9.84% We need to find annual rate which is quarterly compounded. Let the effective…

Q: Assuming a 360-day year, the interest charged by the bank, at the rate of 6%, on a 90-day,…

A: Interest charged by the bank = Amount of notes payable x rate of interest x no. of days / 360

Q: What amount must be deposited at the bank today to grow to $600 in 4 years, assuming 10% interest…

A: Amount means the sum to be received after few year with interest. Principal means the sum to be…

Q: A bank CD that pays 6.86 percent compounded daily (on a 365-day per year basis). Calculate the…

A: In the given question we need to calculate the EAR i.e. effective annual interest rate.

Q: The Bank pays $1,200 in a bank deposit after a period of 12 years at an annual interest rate of 6.5%…

A: The future value is the value of an asset in the future time period given a growth rate and time…

Q: What is the effective rate of interest if a bank specified a nominal rate of 20% compounded…

A: In effective rate of interest the compounding are taken into consideration.

Q: The Bank gives an advertisement of 15% account that yields 15.56% annually. How often is the…

A: Bank Account Interest Rate = 15% Bank Account Yield = 15.56%

Q: your bank also requires that the monthly mortgage payments include properety tax and homeowners…

A: Formulas: Total monthly payment = Monthly payment of property tax + Monthly payment of insurance

Q: Suppose you have received a credit card offer from a bank that charges interest at 1.1% per quarter,…

A: The nominal rate is the rate that the financial institution quotes when giving out or receiving…

Q: You come across two banks offering different compounding interest rates. Public Bank  offers 12…

A: Effective Annual Rate: The effective annual rate of interest is the actual or the real rate of…

Q: The nominal interest rates for Zenith and HFC banks are quoted as follows: - Zenith bank pays…

A: Effective annual rate (EAR) : acctual interest rate taking the effect of compounding. EAR formula:…

Q: A bank offers 6.00% on savings accounts. What is the effective annual rate if interest is compounded…

A: The real interest that an investor earns on the investment and a borrower pays on loan after…

Q: What is the effective interest rate of a simple discount note for $32,000, at an ordinary bank…

A: Given: Principal amount =$32000Discount rate =13%Time duration =10 daysNumber of days in a year =360…