Which of the following statements is correct, assuming positive interest rates and holding other things constant?...
Which of the following statements is correct, assuming positive interest rates and holding other things constant?
A) Banks A and B offer the same nominal annual rate of interest, but A pays interest daily and B pays semiannually. A deposit in Bank B will have a higher value in five years.
B) Banks A and B offer the same nominal annual rate of interest, but A pays interest quarterly and B pays monthly. A deposit in Bank B will have a higher value in five years.
C) Banks A and B offer the same annual rate of interest, but A pays interest quarterly and B pays semiannually. A deposit in Bank A will have a higher value in five years.
D) Banks A and B offer the same nominal annual rate of interest, but A pays interest weekly and B pays quarterly. A deposit in Bank B will have a higher value in five years
Homework Answers
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correct answer is optin : B) Banks A and B offer the same nominal annual rate of interest, but A pays interest quarterly and B pays monthly. A deposit in Bank B will have a higher value in five years.
Bank B offer the interet monthly but A offer quarterly therefore amunt in bank B will be higher compared to bank A.
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