Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers Bank. Mystic offers 16% interest compounded semiannually. Four Rivers offers 12% interest compounded quarterly. Melvin has $11,300 to invest. He expects to withdraw the money at the end of 10 years. Calculate interest for each bank and identify which bank gives Melvin the better deal? (Use the Table provided.) Note: Do not round intermediate calculations. Round your answers to the nearest cent. Interest Mystic Four Rivers Better deal

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 19P
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Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers Bank. Mystic offers 16% interest
compounded semiannually. Four Rivers offers 12% interest compounded quarterly. Melvin has $11,300 to invest. He expects to
withdraw the money at the end of 10 years.
Calculate interest for each bank and identify which bank gives Melvin the better deal? (Use the Table provided.)
Note: Do not round intermediate calculations. Round your answers to the nearest cent.
Interest
Mystic
Four Rivers
Better deal
Transcribed Image Text:Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers Bank. Mystic offers 16% interest compounded semiannually. Four Rivers offers 12% interest compounded quarterly. Melvin has $11,300 to invest. He expects to withdraw the money at the end of 10 years. Calculate interest for each bank and identify which bank gives Melvin the better deal? (Use the Table provided.) Note: Do not round intermediate calculations. Round your answers to the nearest cent. Interest Mystic Four Rivers Better deal
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