TVM Homework - If you withdraw funds from the second bank...

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Time Value of Money Homework 12. a. P(stream a)= . + . + . + . 1001 08 4001 082 4001 083 3001 084 = $973.57 P(stream b)= . + . + . + . 3001 08 4001 082 4001 083 1001 084 = $1,011.75 b. both $1200 24. a. EAR(First City Bank) = 7% EAR (second City Bank) = +. - 1 06544 1 = 6.66% b. Yes because if you withdraw your funds at any time from the first bank, you will not be paid any interest.
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Unformatted text preview: If you withdraw funds from the second bank before the end of the year you will still be paid interest for the quarters that you had the funds in the bank. 6. = + 12m 6m1 i5 = + . = + = . % 2 1 i5 1 147 1 i i 14 87 25. , = , + = % 168 925 150 0001 i6 i 2 APR= 8% EAR = .- = . % 1 024 1 8 24 26....
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This note was uploaded on 11/16/2009 for the course FIN 125 taught by Professor Buell during the Fall '08 term at Lehigh University .

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