Question
Your friend realizes you have been taking a finance course. He inherited $100,000 from his great aunt. He has uses for $75,000 of the funds.
Your friend realizes you have been taking a finance course. He inherited $100,000 from his great aunt. He has uses for $75,000 of the funds. However, he plans on placing $25,000 in a savings account. One bank quoted him a 2.00% rate compounded quarterly and another bank quoted him a 1.975% rate compounded daily.
He has heard the term: effective annual interest rate (page 146 textbook). He asks you to compute the effective interest rate for these two choices and then tell him which one to choose?
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Handbook Of Project Finance For Water And Wastewater Systems
Authors: Michael Curley
1st Edition
0873714865, 978-0873714860
