A bank pays interest at the nominal rate of 8.3% per year. Find the following effective yields. Round your answers to two decimal places. (a) The effective yield is % when interest is compounded annually. (b) The effective yield is % when interest is compounded monthly. (c) The effective yield is % when interest is compounded continuously.

A bank pays interest at the nominal rate of 8.3% per year. Find the following effective yields. Round your answers to two decimal places. (a) The effective yield is % when interest is compounded annually. (b) The effective yield is % when interest is compounded monthly. (c) The effective yield is % when interest is compounded continuously.

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

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9) A bank offers loans at a rate of 19% per year, compounded quarterly. How much is the effective annual rate at which loans are offered? options: 25.35 21.93 20.22 17.66
Bank A pays 6% simple interest annually on its investment accounts. If Bank B pays interest on its account compounded semiannually, what is the annual percentage rate (APR) should the bank set if it wants to match Bank A over an investment horizon of 10 years?
need both answer.
Find the nominal annual rate of interest compounded quarterly that is equivalent to 4.8% compounded semi-annually. The nominal annually compounded rate of interest is %. (Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.)
Answer the following Compound Interest problem using the provided formula ONLY. Show your complete solution. 7. Compound Interest A. If the sum of P 12,000 (pesos) is deposited in an account earning interest rate of 9% compounded quarterly, what will it become after 1 year? B. In the previous problem, what is the effective rate? C. What is then the equivalent nominal interest rate if compounded monthly?
A three-year bank CD paying 6.82 percent compounded monthly. Calculate effective annual interest rate (EAR)? (Round answer to 2 decimal places, e.g. 15.25%.) Effective annual rate % A three-year bank CD paying 7.32 percent compounded annually. Calculate effective annual interest rate (EAR)? (Round answer to 2 decimal places, e.g. 15.25%.)
You are considering three alternative investments: A three-year bank CD paying 7.19 percent compounded quarterly. Calculate effective annual interest rate (EAR)? (Round answer to 2 decimal places, e.g. 15.25%.) Effective annual rate ___________ % LINK TO TEXT A three-year bank CD paying 6.99 percent compounded monthly. Calculate effective annual interest rate (EAR)? (Round answer to 2 decimal places, e.g. 15.25%.) Effective annual rate __________ % Which of the above investments has the highest effective annual interest rate (EAR)? The three-year bank CD paying has the highest effective yield a). 6.99% interest compand monthly b). 7.49% interest compond annually c). 7.19% interest compond quartley has the highest yield
A bank offers a fixed term deposit investment account with an interest rate of 6.5% per annum compounding quarterly how do I work out what the equivalent effective interest rate is
A bank pays interest at the nominal rate of 3.8% per year. What is the effective annual yield if compounding is:ROUND ALL ANSWERS TO THE NEAREST 0.01% . A) annual?___% B) monthly?___% C) continuously?___%
A passbook savings account has a rate of 7%. Find the effective annual yield if the interest is compounded quarterly. Click the icon to view some finance formulas. The effective annual yield is (Round to the nearest tenth as needed.) ……..
An effective annual interest rate of 35% has been determined with continuous compounding. What is the nominal interest rate that was compounded continuously to get this number?

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