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In Bank A, the annual interest rate is 13,6% compounded quarterly. In Bank B, the annual interest rate is 13,8% compounded monthly. a) If you
In Bank A, the annual interest rate is 13,6% compounded quarterly. In Bank B, the annual interest rate is 13,8% compounded monthly. a) If you place 10.000 in Bank A and another 10.000 t in Bank B today for 5 years in which bank will you get more interest? How much more interest will you earn? b) If you place 50.000 into an account of Bank A which offers a repayment plan with equal installments in each of the following 10 years, what will be the amount of annuities? c) If you place 20.000 into an account of Bank B which offers a repayment plan with 2 equal installments at the end of 2nd and 4th years, what will be the amount of these installments? (Please show all your work and use at least 2 decimal places for the interest rates. You can round the installments to the next integers.) Present Value of an Annuity Future Value of an Annuity A PV=Ax ( 1-(1+i)" ) FV = A x ((1+1)-1)
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