Which do you prefer : a bank account that pays 4.5% per year (EAR) for three years or

a) An account that pays 2.5% every 6 months for three years?

b) An account that pays 6.5% every 18 months for three years?

c) An account that pays that pays 0.42% per month 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 4.5% per year for 3 years:

The amount you will receive after three years is $__ (Round to five decimal places)

a) An account that pays 2.5% every six months for 3 years?

If you deposit $1 into a bank account that pays 2.5% every 6 months for 3 years:

The amount you will receive after three years is $__ (Round to five decimal places)

Which bank account would you prefer?

b) An account that pays 6.5% every 18 months for 3 years?

If you deposit $1 into a bank account that pays 6.5% every 18 months for 3 years:

The amount you will receive after three years is $__ (Round to five decimal places)

Which bank account would you prefer?

c) An account that pays 0.42% per month for 3 years?

If you deposit $1 into a bank account that pays 0.42% per month for 3 years:

The amount you will receive after three years is $__ (Round to five decimal places)

Which bank account would you prefer?