Question: Why is it important to convert interest rates into the APY on different accounts and with different banks? Some banks and accounts pay higher advertised

Why is it important to convert interest rates into the APY on
different accounts and with different banks?
Some banks and accounts pay higher advertised rates.
With FDIC Banks it is not necessary to convert interest rates for
comparison.
The same advertised rate will vary with different compounding periods.
The Truth in Savings Act of 1993 omits this comparison.
Why is it important to convert interest rates into the APY

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

Covid 1 9 disease outbreak was indeed a global disaster. This pandemic forced for a change in consumer behavior in almost all the market sectors . The Botswana local restaurant brand The Braai Place...

Q:

1. Do banks prefer to meet their reserve shortfalls by borrowing from the Federal Reserve, or by borrowing from each other a. the banks make no preferences b. borrowing half from other banks and half...

Q:

1. P repare journal entries to record the following hypothetical 2006 events: a. A customer deposits $50,000 in a WaMu sav ings account on 1/1/2006 . b. WaMu pays 1% (annual) interest on that deposit...

Q:

Trading restrictions imposed on specific stocks or stock indices are referred to as Question 1 options: a) index busters. b) index options. c) circuit breakers. d) protective covenants. Save Question...

Q:

Loan contracts are set for different time periods. Contracts that mature between 1 to 10 years are called intermediate-term credit, or term loans. When firms need capital, they resort to different...

Q:

A Case Study of Hyperinflation in Zimbabwe Introduction Between 1980 and 1997 the government of Zimbabwe implemented monetary and fiscal policies that allowed for the country to prosper in the global...

Q:

According to the article "The Global Stock Markets Hidden Juice" provided below: a. Identify the most important issue in the article. b. Identify at least 10 Stakeholders involved in that issue. c....

Q:

It is becoming widely expected that interest rates will rise in the coming year. In recent weeks the 10 year US bond has risen from about 1.50% to 1.80%. Using the appendix for chapter 2 on Webster...

Q:

Chapter 7:7.2 #2 (p. 168) Chapter 8:8.2 #3 (p. 205) Chapter 9:9.2 #1 (p. 225) a., b., and c. (for c., only answer the adjustable rate mortgage part Chapter 7 from Personal Finance was adapted by The...

Q:

i need some one toanswering these three questions. make sure to include apa format for the information pretty straight forward. Attached below are the chapters. Chapter 7: 7.2 #2 (p. 168) Chapter 8:...

Q:

Pls help me to answer the think critically 11.1, 11.2 & Review Concepts. This book is Banking system 2nd edition 11. Robbery Prevention and Response goals - Discuss how security measures can prevent...

Q:

Can the GRG algorithm be used to solve LP problems? If so, will it always identify a corner point of the feasible region as the optimal solution (as does the simplex method)?

Q:

A two-wire air line has the following line parameters: R' = 0.404 (m/m), L0 = 2.0 (H/m), G' = 0, and C' = 5.56 (pF/m). For operation at 5 kHz, determine (a) the attenuation constant a, (b) the phase...

Q:

What is meant by 'gross domestic product' (GDP)?

Q:

A company issues 1,050 shares of its common stock for $33,600 cash. Prepare journal entries to record this event under each of the following separate situations.