Question
Which do you prefer: a bank account that pays 5.1% per year (EAR) for three years or a. An account that pays 2.8% every six
Which do you prefer: a bank account that pays 5.1% per year (EAR) for three years or
a. An account that pays 2.8% every six months for three years?
b. An account that pays 8.3% every 18 months for three years?
c, An account that pays .67% every per months for three years?
(Note: Compare your current bank EAR with each of the three alternative accounts. Be careful not to round any intermediate steps less than six decimal places.)
If you deposit $1 into a bank account that pays 5.1% per year for three years: The amount you will receive after three years is
$nothing. (Round to five decimal places.)
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