Which do you prefer: a bank account that pays 5.0% per year (EAR) for three years or a. An account that pays 2.5% every six months for three years? b. An account that pays 7.5% every 18 months for three years? c. An account that pays 0.50% per month for three years? (Note: Compare your current bank EAR with each of the three alternative accounts. Be careful not to round any intermediate steps less than six decimal places.) If you deposit $1 into a bank account that pays 5.0% per year for three years: The amount you will receive after three years is _________________ (Round to five decimal places.)
Which do you prefer: a bank account that pays 5.0% per year (EAR) for three years or a. An account that pays 2.5% every six months for three years? b. An account that pays 7.5% every 18 months for three years? c. An account that pays 0.50% per month for three years? (Note: Compare your current bank EAR with each of the three alternative accounts. Be careful not to round any intermediate steps less than six decimal places.) If you deposit $1 into a bank account that pays 5.0% per year for three years: The amount you will receive after three years is _________________ (Round to five decimal places.)
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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Which do you prefer: a bank account that pays
5.0%
per year (EAR) for three years ora. An account that pays
2.5%
every six months for three years? b. An account that pays
7.5%
every 18 months for three years? c. An account that pays
0.50%
per month for three years?(Note: Compare your current bank EAR with each of the three alternative accounts. Be careful not to round any intermediate steps less than six decimal places.)
If you deposit
$1
into a bank account that pays
5.0%
per year for three years:The amount you will receive after three years is _________________
(Round to five decimal places.)
(Round to five decimal places.)
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