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Here are some alternative investments you are considering for one year. (i) Bank A promises to pay 8% on your deposit compounded annually. (ii) Bank

Here are some alternative investments you are considering for one year. (i) Bank A

promises to pay 8% on your deposit compounded annually. (ii) Bank B promises to

pay 8% on your deposit compounded daily. Compare the eective annual rate (EAR)

on these investments.

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