k. Five banks offer the same nominal rate on deposits, but A pays interost annually, B pays semiannually, C pays quarterly, D pays monthly, and E pays daily. (1) Calculating the effective annual rate for each bank and the future values of the deposit at the end of 1 year and 2 years Nominal rate (twou) Deposit (PV) Number of days per year 6% $5.000 365 EAR A B FV after 1 year C D 6.148 6.09% $5,304,50 $5,306.82 6.17% $5,30839 FV after 2 yoars (2) Calculating the nominal rates that will cause all of the banks to provide the same effective annual rate as Bank A B C D E. Nominal rate (wow) Formulas (3) Calculating the amount of payment to be made annually for A, semiannually for B, quarterly for C, monthly for D, and daily for E Needed amount (FV) Number of years (N) $5.000 EAR FV after 1 year FV after 2 years