In 2014, Bank A paid 3% interest, compounded daily, on a 8-year CD, while Bank B paid 3% compounded quarterly. a. What are the effective rates for the two CDs? Use 365-day year. b. Suppose $4000 was invested in each of these accounts. Find the compound amount after eight years for each account. ------------------------------------------------------------------------------------------------ a. The effective rate for Bank A is % (round to 3 decimal places) The effective rate for Bank B is % b. For Bank A, the compound amount after 8 years is $ For Bank A, the compound amount after 8 years is $ (round to the nearest cent)
In 2014, Bank A paid 3% interest, compounded daily, on a 8-year CD, while Bank B paid 3% compounded quarterly. a. What are the effective rates for the two CDs? Use 365-day year. b. Suppose $4000 was invested in each of these accounts. Find the compound amount after eight years for each account. ------------------------------------------------------------------------------------------------ a. The effective rate for Bank A is % (round to 3 decimal places) The effective rate for Bank B is % b. For Bank A, the compound amount after 8 years is $ For Bank A, the compound amount after 8 years is $ (round to the nearest cent)
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 3STP
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In 2014, Bank A paid 3% interest, compounded daily, on a 8-year CD, while Bank B paid 3% compounded quarterly.
a. What are the effective rates for the two CDs? Use 365-day year.
b. Suppose $4000 was invested in each of these accounts. Find the compound amount after eight years for each account.
------------------------------------------------------------------------------------------------
a. The effective rate for Bank A is % (round to 3 decimal places)
The effective rate for Bank B is %
b. For Bank A, the compound amount after 8 years is $
For Bank A, the compound amount after 8 years is $
(round to the nearest cent)
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