1.A three-year bank CD paying 7.00 percent compounded quarterly. Calculate effective annual interest rate (EAR)? (Round answer to 2 decimal places, e.g. 15.25%.)

Effective annual rate

%

2.A three-year bank CD paying 6.80 percent compounded monthly. Calculate effective annual interest rate (EAR)? (Round answer to 2 decimal places, e.g. 15.25%.)

Effective annual rate

%

3.A three-year bank CD paying 7.30 percent compounded annually. Calculate effective annual interest rate (EAR)? (Round answer to 2 decimal places, e.g. 15.25%.)

Effective annual rate

%

4.Which of the above investments has the highest effective annual interest rate (EAR)?

The three-year bank CD paying

A.6.80 percent interest compounded monthly

B.7.00 percent interest compounded quarterly

C.7.30 percent interest compounded annually has the highest effective yield.