Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers Bank. Mystic offers 13% interest compounded semiannually. Four Rivers offers 12% interest compounded quarterly. Melvin has $11,600 to invest. He expects to withdraw the money at the end of 6 years. Calculate the interest earned at the end of Melvin's investment period at each bank. Identify which bank gives him the better deal? (Do not round intermediate calculations. Round your answer to the nearest cent.)

Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers Bank. Mystic offers 13% interest compounded semiannually. Four Rivers offers 12% interest compounded quarterly. Melvin has $11,600 to invest. He expects to withdraw the money at the end of 6 years. Calculate the interest earned at the end of Melvin's investment period at each bank. Identify which bank gives him the better deal? (Do not round intermediate calculations. Round your answer to the nearest cent.)

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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Heather deposited $1, 700 at her local credit union in a savings account at the rate of 9.8% paid as simple interest. She will earn interest once a year for the next 13 years. If she were to make no additional deposits or withdrawals, how much money would the credit union owe Heather in 13 years?
Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers Bank. Mystic offers 10% interest compounded semiannually. Four Rivers offers 8% interest compounded quarterly. Melvin has $10,000 to invest. He expects to withdraw the money at the end of 4 years.Calculate interest for each bank and identify which bank gives Melvin the better deal? (Use the Table provided.) (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)
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Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers Bank. Mystic offers 10% interest compounded semiannually. Four Rivers offers 8% interest compounded quarterly. Melvin has $10,000 to invest. He expects to withdraw the money at the end of 4 years. Which bank gives Melvin the better deal? Check your answer. Mystic Interest 10% Compounded: Semiannually Four Rivers Interest 8% Compounded Quarterly Melvin's investment 10,000 Withdrawal expectation in years: 4 Required: Please use the above information to answer the following: Mystic Period used: Rate used: Factor used: Future value of investment: Four Rivers Period used: Rate used: Factor used: Future Value of investment: Which bank gives Melvin the better deal?

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