2022 QUESTION 2 (Marks: 10) You have invested your annual bonus in alone vear fixed deposit at Alpha Bank which offers a nominar interest rate of 12% per annum compounded bi-annually However, at a braai over the weekend, your friend has pointed out that you should have rather invested at the same bank he is a client of, namely Beta Bank, because even though the nominal interest rate is half a percent less than Alpha Bank, the interest is compoundedquarterly, and you will therefore get a greater return. REQUIRED: Discuss whether your friend's advice was correct. Provide calculations to support your answer.

2022 QUESTION 2 (Marks: 10) You have invested your annual bonus in alone vear fixed deposit at Alpha Bank which offers a nominar interest rate of 12% per annum compounded bi-annually However, at a braai over the weekend, your friend has pointed out that you should have rather invested at the same bank he is a client of, namely Beta Bank, because even though the nominal interest rate is half a percent less than Alpha Bank, the interest is compoundedquarterly, and you will therefore get a greater return. REQUIRED: Discuss whether your friend's advice was correct. Provide calculations to support your answer.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 16E

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