A bank has two options for a certificate of deposit of $4000. Option A has an annual interest rate of 3.5 % compounded quarterly for 3 years. Option B has an annual interest rate of 4 % compounded continuously for 30 months. Which is the better deal? Please set up your formulas, and then you can use a calculator to estimate your solutions.

A bank has two options for a certificate of deposit of $4000. Option A has an annual interest rate of 3.5 % compounded quarterly for 3 years. Option B has an annual interest rate of 4 % compounded continuously for 30 months. Which is the better deal? Please set up your formulas, and then you can use a calculator to estimate your solutions.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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