The First National Bank is offering a 3 year certificate of deposit (CD) at 4% interest compounded quarterly; Second National Bank is offering a 3 year CD at 5% interest compounded annually. (Round your answers to two decimal places.) (a) If you were interested in investing $7,000 in one of these CDs, calculate the compound amount (in $) of each offer. (Use Table 11-1.) First National Bank $ Second National Bank $ (b) What is the annual percentage yield of each CD? First National Bank % Second National Bank (c) If Third National Bank has a 3 year CD at 4.5% interest compounded monthly, use the compound interest formula to calculate the compound amount (in $) of this offer.

The First National Bank is offering a 3 year certificate of deposit (CD) at 4% interest compounded quarterly; Second National Bank is offering a 3 year CD at 5% interest compounded annually. (Round your answers to two decimal places.) (a) If you were interested in investing $7,000 in one of these CDs, calculate the compound amount (in $) of each offer. (Use Table 11-1.) First National Bank $ Second National Bank $ (b) What is the annual percentage yield of each CD? First National Bank % Second National Bank (c) If Third National Bank has a 3 year CD at 4.5% interest compounded monthly, use the compound interest formula to calculate the compound amount (in $) of this offer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The First National Bank is offering a 3 year certificate of deposit (CD) at 4%
interest compounded quarterly; Second National Bank is offering a 3 year
CD at 5% interest compounded annually. (Round your answers to two
decimal places.)
(a) If you were interested in investing $7,000 in one of these CDs, calculate
the compound amount (in $) of each offer. (Use Table 11-1.)
First National Bank
Second National Bank
2$
(b) What is the annual percentage yield of each CD?
First National Bank
%
Second National Bank
%
(c) If Third National Bank has a 3 year CD at 4.5% interest compounded
monthly, use the compound interest formula to calculate the compound
amount (in $) of this offer.
$

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