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The table below shows the mortgage interest rates from three local banks. Calculate the effective rates for these three mortgage rates. (Note: Enter your answers
The table below shows the mortgage interest rates from three local banks. Calculate the effective rates for these three mortgage rates. (Note: Enter your answers in percentage and round them up to two decimal points. Example: 0.010345 or 10.345% as 10.35)
| Bank | Mortgage Interest Rate (%) | Number of Times Compounded | Effective Rate (%) |
| X | 3.80 | Quarterly | |
| Y | 3.73 | Monthly | |
| Z | 3.56 | Daily |
Note: EAR = (1 + (APR / m))m 1
Based on your calculation above, which bank would you go to for a mortgage? Enter your answer in . (Note: If your answer is Bank Z, just type Z).
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