places.

Nominal rate

B

C

D

$\frac{?}{\text{b}\text{a}\text{r}}(\%)$

$D$

$\%E$

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.