Which do you prefer: a bank account that pays 5% 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 0.5% per month for three years? a. An account that pays 2.5% every six months for three years? If you deposit $1 into a bank account that pays 5% per year for three years, you will have $nothing. (Round to five decimal places.) If you deposit $1 into a bank account that pays 2.5% every six months for three years, the amount you will receive after three years is $nothing. (Round to five decimal places.) Therefore, you will prefer: ▼ 2.5% every six months for three years 5% per year for three years . (Select from the drop-down menu.) b. An account that pays 7.5% every 18 months for three years? If the account pays 7.5% every 18 months for three years, the amount you will receive after three years is $nothing. (Round to five decimal places.) Therefore, you will prefer: ▼ 5% per year for three years 7.5% every 18 months for three years . (Select from the drop-down menu.) c. An account that pays 0.5% per month for three years? If the account pays 0.5% every month for three years, the amount you will receive after three years is $_______________ (Round to five decimal places.) Therefore, you will prefer: ▼ 0.5% every month for three years 5 % per year for three years . (Select from the drop-down m
Which do you prefer: a bank account that pays 5% 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 0.5% per month for three years? a. An account that pays 2.5% every six months for three years? If you deposit $1 into a bank account that pays 5% per year for three years, you will have $nothing. (Round to five decimal places.) If you deposit $1 into a bank account that pays 2.5% every six months for three years, the amount you will receive after three years is $nothing. (Round to five decimal places.) Therefore, you will prefer: ▼ 2.5% every six months for three years 5% per year for three years . (Select from the drop-down menu.) b. An account that pays 7.5% every 18 months for three years? If the account pays 7.5% every 18 months for three years, the amount you will receive after three years is $nothing. (Round to five decimal places.) Therefore, you will prefer: ▼ 5% per year for three years 7.5% every 18 months for three years . (Select from the drop-down menu.) c. An account that pays 0.5% per month for three years? If the account pays 0.5% every month for three years, the amount you will receive after three years is $_______________ (Round to five decimal places.) Therefore, you will prefer: ▼ 0.5% every month for three years 5 % per year for three years . (Select from the drop-down m
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%
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
0.5%
per month for three years?a. An account that pays
2.5%
every six months for three years? If you deposit
$1
into a bank account that pays
5%
per year for three years, you will have
$nothing.
(Round to five decimal places.)If you deposit
$1
into a bank account that pays
2.5%
every six months for three years, the amount you will receive after three years is
$nothing.
(Round to five decimal places.)Therefore, you will prefer:
.
(Select from the drop-down menu.)
▼
2.5% every six months for three years
5% per year for three years
b. An account that pays
7.5%
every 18 months for three years? If the account pays
7.5%
every 18 months for three years, the amount you will receive after three years is
$nothing.
(Round to five decimal places.)Therefore, you will prefer:
.
(Select from the drop-down menu.)
▼
5% per year for three years
7.5% every 18 months for three years
c. An account that pays
0.5%
per month for three years?If the account pays
0.5%
every month for three years, the amount you will receive after three years is
$_______________
(Round to five decimal places.)Therefore, you will prefer:
.
(Select from the drop-down m
▼
0.5% every month for three years
5 % per year for three years
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