Author Question: A recent advertisement in the financial section of a magazine carried the following claim: "Invest ... (Read 72 times)

Alainaaa8 · **on:** Apr 25, 2021

Question 1

You wish to deposit $7,000 in an account at the Shylock Bank. The bank pays interest at a nominal annual rate of 10% compounded quarterly. What is the effective interest rate offered by Shylock?
◦ 10.38%
◦ 10.00%
◦ 9.65%
◦ 11.21%
◦ 10.47%

Question 2

A recent advertisement in the financial section of a magazine carried the following claim: "Invest your money with us at 14 percent, compounded annually, and we guarantee to double your money sooner than you imagine." Ignoring taxes, how long would it take to double your money at a nominal rate of 14 percent, compounded annually?
◦ 3.66 years
◦ 5.29 years
◦ 7.00 years
◦ 10.24 years
◦ 14.00 years

joshbk44 · **Reply #1 on:** Apr 25, 2021

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