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Periodic interest rates. You have a savings account in which you leave the funds for one year witho withdrawing from the account. Which would you rather have: a daily compounded rate of 0.045%, a compounded rate of 0.305%, a monthly compounded rate of 1.35%, a quarterly compounded rater of semiannually compounded rate of 8.5%, or an annually compounded rate of 17%?

Periodic interest rates. You have a savings account in which you leave the funds for one year witho withdrawing from the account. Which would you rather have: a daily compounded rate of 0.045%, a compounded rate of 0.305%, a monthly compounded rate of 1.35%, a quarterly compounded rater of semiannually compounded rate of 8.5%, or an annually compounded rate of 17%?

Essentials Of Investments
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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Periodic interest rates. You have a savings account in which you leave the funds for one year without adding to or withdrawing from the account. Which would you rather have: a daily compounded rate of 0.045%, a weekly compounded rate of 0.305 %, a monthly compounded rate of 1.35%, a quarterly compounded rater of 4.15%, a semiannually compounded rate of 8.5%, or an annually compounded rate of 17%?
Transcribed Image Text:Periodic interest rates. You have a savings account in which you leave the funds for one year without adding to or withdrawing from the account. Which would you rather have: a daily compounded rate of 0.045%, a weekly compounded rate of 0.305 %, a monthly compounded rate of 1.35%, a quarterly compounded rater of 4.15%, a semiannually compounded rate of 8.5%, or an annually compounded rate of 17%?
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