Question
You have $1,500 to invest. You have 2 choices: savings account A, which earns 8.75 percent compounded annually or savings account B, which earns 8.50
You have $1,500 to invest. You have 2 choices: savings account A, which earns 8.75 percent compounded annually or savings account B, which earns 8.50 percent compounded monthly. Which account should you choose and why?
| B; because the quoted rate is higher |
| A; because it has a higher effective annual rate |
| B; because it has a higher effective annual rate |
| A; because it has the higher stated rate |
| A; because it has the higher quoted rate |
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
3rd Edition
0471375942, 978-0471375944
