A 3-month (90-day) NZD deposit is 2.75% and 6-month (180-day) NZD deposit is 3.00%. What is the 3x6 NZD deposit rate?

Question

Quizplus · Accepted Answer

To calculate the 3x6 NZD deposit rate, we need to use the formula:
(1 + r)^6 = (1 + r1) x (1 + r2)
Where r is the 3x6 rate, r1 is the 3-month rate and r2 is the 6-month rate.

Plugging in the values we get:
(1 + r)^6 = (1 + 0.0275) x (1 + 0.03)
(1 + r)^6 = 1.057175
1 + r = (1.057175)^(1/6)
1 + r = 1.0054223
r = 0.0054223 or 0.54223%

Therefore, the 3x6 NZD deposit rate is 0.54223% or 3.2278% (rounded to four decimal places).

The best choice is B.

A 3-Month (90-Day) NZD Deposit Is 2