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johnny2585
johnny2585
18.02.2020 • 
Business

An investor can invest money with a particular bank and earn a stated interest rate of 15.40%; however, interest will be compounded quarterly. What are the nominal, periodic, and effective interest rates for this investment opportunity?

Interest Rate
Nominal Rate:
Periodic Rate:
Effective Annual rate:

You want to invest $23,000 and are looking for safe investment options. Your bank is offering you a certificate of deposit that pays a nominal rate of 4% that is compounded semiannually. What is the effective rate of return that you will earn from this investment?

a. 4.354%
b. 4.040%
c. 3.946%
d. 3.918%

Suppose you decide to deposit $23,000 in a savings account that pays a nominal rate of 10%, but interest is compounded daily. Based on a 365-day year, how much would you have in the account after four months? (Hint: To calculate the number of days, divide the number of months by 12 and multiply by 365.)

a. $24,968.69
b. $23,304.11
c. $25,206.48
d. $23, 779.70

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