Bank A pays 11.50% annual interest, compounded quarterly, on its savings accounts. Bank B wants to ensure that the effective annual rate offered by bank A, with its interest being compounded on monthly basis. Calculate the nominal rate bank B must set.
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(b) Bank A pays 11.50% annual interest, compounded quarterly, on its savings accounts. Bank
B wants to ensure that the effective annual rate offered by bank A, with its interest being
compounded on monthly basis. Calculate the nominal rate bank B must set.
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- 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?Pacific Bank pays a 9.75% nominal rate on deposits, with monthly compounding. What effective annual rate (EFF%) does the bank pay? Select the correct answer.A bank pays a simple interest rate of 4.1% on 30 to 179-day GICs of at least $100,000. What is the effective annualized rate of return:a) On a 40-day GIC?b) On a 160-day GIC?
- a bank charges one and one-half percent per month on the unpaid balance for purchases made its credit card. this is equivalent to what effective annual interest rate?Bank A pays 8% interest, compounded quarterly, on its money market account. Themanagers of Bank B want its money market account’s effective annual rate to equal thatof Bank A, but Bank B will compound interest on a monthly basis. What nominal, orquoted, rate must Bank B set?A bank quotes you a nominal interest rate of 12%, compounded monthly, on a savings account. What is the effective annual rate? %
- Credit card issuers must by law print the annual interest rate they charged borrowers. If the annual interest rate is stated to be 15%, with interest paid monthly, what is the actual annual cost that the bank charges its customers on the card?A certificate of deposit (CD) is an agreement between a bank and a saver in which the bank guarantees an interest rate and the saver commits to leaving his or her deposit in the account for an agreed-upon period of time. National Trust Savings offers five-year CDs at 8.33% compounded daily, and Bank of the Future offers five-year CDs at 8.36% compounded annually. Compute the annual yield for each institution. (Round your answers to two decimal places.) NTS BF %Pacific Bank pays a 7.00% nominal rate on deposits, with monthly compounding. What effective annual rate (EFF%) does the bank pay? Select the correct answer. a. 6.63% b. 7.23% c. 6.93% d. 7.53% e. 7.83%
- A bank is currently offering a savings account paying an interest rate of 6.0 percent compounded quarterly. It would like to offer another account ,with the same effective annual rate ,but compounded monthly. What is the equivalent rate of compound monthly.?b) If the same two $15,000 deposits are made (at time 0 and end of year 4) into a different account that earns a nominal annual interest rate of 8.4% compounded quarterly, in which account should the money be deposited in order to earn more interest?A certificate of deposit (CD) is an agreement between a bank and a saver in which the bank guarantees an interest rate and the saver commits to leaving his or her deposit in the account for an agreed-upon period of time.First National Bank offers two-year CDs at 9.16% compounded daily, and Citywide Savings offers two-year CDs at 9.17% compounded quarterly. Compute the annual yield for each institution. (Round your answers to two decimal places.) FNB % CS %