Imagine you are going to a bank to do a term deposit for 5 years. This money

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Imagine you are going to a bank to do a term deposit for 5 years. This money is for your house purchase in five years' time. You are trying to shop around in order to find the best return for your money. You have $100,000 to play around.

1. Bank A quotes you a rate of 5.9% APR and it is compounding annually. What is the Future Value in year 5?

2. Bank B quotes you a rate of 5.85% APR and it is compounding semi-annually. What is the Future Value in year 5?

3. Which one you would pick assuming your goal is to maximize your return?

Related Book For answer-question

Data Analysis and Decision Making

ISBN: 978-0538476126

4th edition

Authors: Christian Albright, Wayne Winston, Christopher Zappe

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Posted Date: Sep 07, 2023 02:04 AM

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Imagine you are going to a bank to do a term deposit for 5 years. This money

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1 To calculate the Future Value FV in year 5 for Bank As term deposit we can use the formula for com... View the full answer

Data Analysis and Decision Making

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