Investment 1: Investing that $120,000 in a saving account for 15 years. There are two banks for her choice. Bank A pays a rate of return of 8.5% annually, compounding semi-annually. Bank B pays a rate...


Investment 1: Investing that $120,000 in a saving account for 15 years. There are two banks for
her choice. Bank A pays a rate of return of 8.5% annually, compounding semi-annually. Bank B
pays a rate of return of 8.45 annually, compounding quarterly.
Investment 2: Putting exactly an equal amount of money into ANZ Investment Fund at the end
of each month for 15 years to get 330 000 she still shorts of now. The fund is offering a rate of
return 7% per year, compounding monthly.
Required:
a) Identify which Bank should Molly choose in Investment 1 by computing the effective annual
interest rate (EAR)?



Jun 05, 2022
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