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Alternative Savings Offers Five-Year Term Deposits at 10% Compounded Annually

Question 23

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Alternative Savings offers five-year term deposits at 10% compounded annually while your credit union offers such deposits at 9.6% compounded quarterly. If you have $1000 to invest, what is the maturity value of your deposit
a) at Alternative Savings?
b) at your credit union?

Correct Answer:

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a) FV = 1000.00(1.10)5 = 1000.0...

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