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The Get What You Pay for Bank Advertises Capital Savings

Question 40

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The Get What You Pay For Bank advertises capital savings at 12% compounded monthly while Give Me Your Money Trust offers premium savings at 12.36% compounded yearly. Suppose you have $500.00 to invest for two years.
a) Which deposit will earn more interest?
b) What is the difference in the amount of interest?

Correct Answer:

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a) Bank: PV = 500.00; m = 12; i = blured image = 0.0...

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