The First National Bank is offering a 6-year certificate of deposit (CD) at 4% interest,co 1 answer below »
The First National Bank is offering a 6-year certificate of deposit (CD) at 4% interest,
compounded quarterly; Second National Bank is offering a 6-year CD at 5% interest,
compounded annually.
a. If you were interested in investing $8,000 in one of these CDs, calculate the compound
amount of each offer.
b. What is the annual percentage yield of each CD?
c. (Optional) If Third National Bank has a 6-year CD at 4.5% interest compounded
monthly, use the compound interest formula to calculate the compound amount of
this offer.
