You can put your 100 in Bank A that pays 8 at the end of the year. You can also put your 100 in Bank B that pays 4 at the end of six months and then 4 again at the end of the year. You will keep your 100 and all interest in the bank. At the end of the year
A) the total will be the same at both banks.
B) the total at Bank A will be greater.
C) the total at Bank B will be greater.
D) the total could be larger at either bank.
Question 2
You place 100 in a bank account that pays 8. If you remove the interest you receive each year you can turn your stock into a flow of
A) 108 per year.
B) 100 per year.
C) 80 per year.
D) 8 per year.
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