Nana Seinfeld (Jerry’s grandma) invested $1500 at an interest rate of 1.25% compounded annually at the Chemical Bank. Cosmo Kramer found out that the bank on the corner (Home Federal Savings Bank) offers $100 if you go in there and they don’t greet you with a “hello!” They ended up settling on $20 for a “how’s it going.” And yet, Kramer was impressed, and invested $1500 at an interest rate of 1.25% compounded quarterly. a) How much money would be in EACH account at the end of one year? b) Which of these two accounts would you choose to invest your money in to earn the greatest interest?
Nana Seinfeld (Jerry’s grandma) invested $1500 at an interest rate of 1.25% compounded annually at the Chemical Bank. Cosmo Kramer found out that the bank on the corner (Home Federal Savings Bank) offers $100 if you go in there and they don’t greet you with a “hello!” They ended up settling on $20 for a “how’s it going.” And yet, Kramer was impressed, and invested $1500 at an interest rate of 1.25% compounded quarterly. a) How much money would be in EACH account at the end of one year? b) Which of these two accounts would you choose to invest your money in to earn the greatest interest?
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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Nana Seinfeld (Jerry’s grandma) invested $1500 at an interest rate of 1.25% compounded annually at the Chemical Bank. Cosmo Kramer found out that the bank on the corner (Home Federal Savings Bank) offers $100 if you go in there and they don’t greet you with a “hello!” They ended up settling on $20 for a “how’s it going.” And yet, Kramer was impressed, and invested $1500 at an interest rate of 1.25% compounded quarterly.
a) How much money would be in EACH account at the end of one year?
b) Which of these two accounts would you choose to invest your money in to earn the greatest interest?
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