An online bank is offering to pay 0.15% interest per month on deposits. Your local bank offers to pay 0.70% interest quarterly? (every 3 months). Which is the higher interest rate?

The EAR for the online bank is 2.8295% and the EAR for the local bank is 1.8149%. Therefore, the offer of 0.15% per month is higher.

The EAR for the online bank is 0.8149% and the EAR for the local bank is 1.8295%. Therefore, the offer of 0.70% per quarter is higher.

The EAR for the online bank is 1.8149% and the EAR for the local bank is 2.8295%. Therefore, the offer of 0.70% per quarter is higher.

The EAR for the online bank is 3.8295% and the EAR for the local bank is 2.8149%. Therefore, the offer of 0.15% per month is higher.

b.)Suppose Capital One is advertising a 60-month, 5.16% APR motorcycle loan. If you need to borrow $7,700 to purchase your dream Harley-Davidson, what will be your monthly payment?

c.)You have just taken out a $24,000 car loan with a 8% APR, compounded monthly. The loan is for five years. When you make your first payment in one month, how much of the payment will go toward the principal of the loan?

d.)You plan to buy a financial product today. You expect that the financial product will give you $150 at the end of first 6 years. Your required rate of return is 8%. What would be fair present value of this financial product?

e.)

You plan to buy a financial product today. You expect that the financial product will give you $300 at the end of first 6 years. If this financial product has an actual market price of $1,500, what is the expected rate of return for this financial product? Should you buy this financial product?

The expected rate of return for this financial product is 5.4718%. If my required rate of return is lower than 5.4718%, I should buy this financial product, otherwise I should not buy.

The expected rate of return for this financial product is 7.4718%. If my required rate of return is higher than 7.4718%, I should buy this financial product, otherwise I should not buy.

The expected rate of return for this financial product is 3.4718%. If my required rate of return is higher than 3.4718%, I should buy this financial product, otherwise I should not buy.

The expected rate of return for this financial product is 3.4718%. If my required rate of return is lower than 3.4718%, I should not buy this financial product, otherwise I should buy.

The expected rate of return for this financial product is 6.4718%. If my required rate of return is higher than 6.4718%, I should buy this financial product, otherwise I should not buy.