Changing compounding frequency: Bank Astra offers deposits compounded annually, semi-annually, and quarterly basis periods. If Peter deposits $10,000 at 12% p.a., for 5 years, which option (annually or semi-annually or quarterly) should he select in order to maximize his return at the end of 5 years? Show your calculations for each option. Calculate the Effective Annual Rate (EAR) of interest for each deposits.
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
Changing compounding frequency: Bank Astra offers deposits compounded annually, semi-annually, and quarterly basis periods. If Peter deposits $10,000 at 12% p.a., for 5 years, which option (annually or semi-annually or quarterly) should he select in order to maximize his return at the end of 5 years? Show your calculations for each option. Calculate the Effective Annual Rate (EAR) of interest for each deposits.
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