FV of investment:

$

\ k. Five banks offer nominal rates of

4%

on deposits, but A pays interest annually, B pays semiannually, C pays quarterly, D pays monthly, and

E

pays daily. Assume 365 days in a year.\ What effective annual rate does each bank pay? If you deposit

$4,000

in each bank today, how much will you have in each bank at the end 1 year? 2 years? Roundyour answers to two decimal places.\ If the TVM is the only consideration, what nominal rate will cause all of the banks to provide the same effective annual rate as Bound your answers to two decimal places.\ Suppose you don't have the

$4,000

but need it at the end of 1 year. You plan to make a series of deposits - annually for

A

, semiannually for

B

, quarterly for

C

, monthly for

D

, and daily for

E

- with payments beginning today. How large must the payments be to each bank? Round your answers to the nearest cent.\ Even if the five banks provided the same effective annual rate, would a rational investor be indifferent between the banks?\ It is more likely that an investor would prefer the bank that compounded frequently.

Five banks offer nominal rates of 4% on deposits, but A pays interest annually, B pays semiannually, C pays quarterly, D pays monthly, and E pays daily. ssume 365 days in a year. 1. What effective annual rate does each bank pay? If you deposit $4,000 in each bank today, how much will you have in each bank at the end 1 var? ? vears? Roundyour answers to two decimal places. 2. If the TVM is the only consideration, what nominal rate will cause all of the banks to provide the same effective annual rate as da n......., ur 3. Suppose you don't have the $4,000 but need it at the end of 1 year. You plan to make a series of deposis - a......., for A, semiannually for B, quarterly for C, monthly for D, and daily for E - with payments beginning today. How large must the payments be to each bank? Round your 4. Even if the five banks provided the same effective annual rate, would a rational investor s? It is more likely that an investor would prefer the bank that compounded frequently