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 0.040%, a weekly compounded rate of
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 0.040%, a weekly compounded rate of
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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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
0.040%,
a weekly compounded rate of
0.265%,
a monthly compounded rate of
1.15%,
a quarterly compounded rater of
3.75%,
a semiannually compounded rate of
8%,
or an annually compounded rate of
16%?
What is the effective annual rate (EAR) of a daily compounded rate of
0.040%?
nothing%
(Round to two decimal places.)Expert Solution
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