You have $5,600 that you want to use to open a savings account. There are five banks located in your area. The rates paid by banks A through E, respectively, are given below. Which bank should you select if your goal is to maximize your interest income?

It would be best to pick the annual rate as is the higher maong the given choised.

bank rates:

3.26 percent, compounded annually

3.20 percent, compounded monthly

3.25 percent, compounded semi-annually

3.10 percent, compounded continuously

3.15 percent, compounded quarterly

Explanation:

we move the rates to annual and check the effective rate:

continuos rate:

3.15 quarterly:

0.0318740511

Explanation:

1. The journal entry for declaration of dividend is shown below:

Retained Earnings A/c Dr

= (8,600 million shares × $0.18 per share) = $1,548 million

          To Dividend payable in cash                                         $1,548 million

(Being dividend is declared)

2. No journal entry should be passed on the record date

3. The journal entry for payment of the cash dividend is shown below:

Cash dividend payable A/c Dr     $1,548 million

      To Cash                                                              $1,5480 million

(Being payment is made for cash dividend)