Bank A pays 4% interest compounded annually on deposits, Bank B pays 3.75% compounded semiannually, and...

  

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Bank A pays 4% interest compounded annually on deposits, Bank B pays 3.75% compounded semiannually, and Bank C pays 3.5% compounded daily. a) Which bank would you use? Why? b) If you deposited $5,000 in each bank today, how much would you have at the end of 2 years? c) What nominal rate would cause Banks B and C to provide the same effective annual rate as Bank A? d) Suppose you do not have $5000 now but need it at the end of 1 year. You plan to make a series of deposits, annually for Bank A, semiannually for Bank B, and daily for Bank C, with payments beginning today. How large must the payments be to each bank? Bank A pays 4% interest compounded annually on deposits, Bank B pays 3.75% compounded semiannually, and Bank C pays 3.5% compounded daily. a) Which bank would you use? Why? b) If you deposited $5,000 in each bank today, how much would you have at the end of 2 years? c) What nominal rate would cause Banks B and C to provide the same effective annual rate as Bank A? d) Suppose you do not have $5000 now but need it at the end of 1 year. You plan to make a series of deposits, annually for Bank A, semiannually for Bank B, and daily for Bank C, with payments beginning today. How large must the payments be to each bank?