uppose that you have $1,000,000 available for investment for a period of four years. After investigating the local banks, you have compiled the following table for comparison.   Bank                                                 Interest Rate                        Compounding Scotia Bank                                           10%                                       Annually National Commercial Bank                     9%                                       Semi-annually First Caribbean International Bank         6.8%                                    Quarterly   Using the Future Value concept (based on calculation), in which bank should you deposit your funds to maximize return and why?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...
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Suppose that you have $1,000,000 available for investment for a period of four years. After investigating the local banks, you have compiled the following table for comparison.

 

Bank                                                 Interest Rate                        Compounding

Scotia Bank                                           10%                                       Annually

National Commercial Bank                     9%                                       Semi-annually

First Caribbean International Bank         6.8%                                    Quarterly

 

Using the Future Value concept (based on calculation), in which bank should you deposit your funds to maximize return and why?

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