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If $ 3 , 5 0 0 is placed in an account that earns a nominal 7 . 5 % , compounded annually, what will
If $ is placed in an account that earns a nominal compounded annually, what will it be worth in years?
Bank X offers a savings account that pays a stated or quoted rate of
Bank Y offers a savings account that pays a stated or quoted rate of
Bank Z offers a savings account that pays a stated or quoted rate of
Bank A offers a savings account that pays a stated or quoted rate of
Bank B offers a savings account that pays a stated or quoted rate of
However, each bank compounds interest paid on the account differently.
Bank X pays semiannually.
Bank Y pays monthly.
Bank pays annually.
Bank A pays weekly.
Bank B pays quarterly.
If you want to save money in one of these banks, which do you pick? The one that compounds:
a semiannually
b monthly
c quarterly
d weekly
e annually
f it does not make a difference because they all pay
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