Question
You have two competing banks trying to get your business. You are considering depositing your money for one year. The First bank offers 6.20% with
You have two competing banks trying to get your business. You are considering depositing your money for one year. The First bank offers 6.20% with annual compounding while the Second bank offers an APR of 6% with daily compounding. Which bank would you prefer and why?
The First Bank because the EAR is higher.
The Second bank because daily compounding is better than monthly compounding.
The First bank because it offers a higher APR.
The Second bank because the EAR is higher.
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Personal Finance
Authors: E Thomas Garman, Raymond E Forgue
10th Edition
143903902X, 9781439039021
