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Author Question: A bank pays a quoted annual (nominal) interest rate of 8. However, it pays interest (compounded) ... (Read 197 times)

cabate

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on: Jul 10, 2018
A bank pays a quoted annual (nominal) interest rate of 8. However, it pays interest (compounded) daily using a 365-day year. What is the effective annual rate of return?
 
  A) 7.86
  B) 7.54
  C) 8.57
  D) 8.33
  E) 9.21

Question 2

1,200 is received at the beginning of year 1, 2,200 is received at the beginning of year 2, and 3,300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is:
 
  A) 6,700
  B) 17,000
  C) 12,510
  D) 7,504
  E) 8,141


Silverbeard98

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Reply #1 on: Jul 10, 2018
Answer to Question 1

D

Answer to Question 2

E


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