Question: Practice Exercise Future Value and Present Value ( worth 10 points extra credit) due on Monday 4/13 [ST 5-1 Problem on p.232] Assume you have

Practice Exercise Future Value and Present Value

( worth 10 points extra credit) due on Monday 4/13

[ST 5-1 Problem on p.232]

Assume you have $10,000 to deposit in a bank for 3 years. Bank A compounds interest annually, Bank B compounds interest semi-annually , Bank C compounds interest quarterly . All three banks have a stated annual interest rate 4%

(a) What amount would you have after three years, in each bank?

(b)What APY (annual percentage yield) or EAR (effective annual interest rate) would you earn in each bank?

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