View the step-by-step solution to:

# The first certificate of deposit, CD #1, pays 4.

Your grandmother asks for your help in choosing a certificate of deposit​ (CD) from a bank with a​ one-year maturity and a fixed interest rate.  The first certificate of​ deposit, CD​ #1, pays 4.45 percent APR compounded quarterly​, while the second certificate of​ deposit, CD​ #2, pays 4.50 percent APR compounded daily. What is the effective annual rate​ (the EAR) of each​ CD, and which CD do you recommend to your​ grandmother?

If the first certificate of​ deposit, CD​ #1, pays 4.45 percent APR compounded quarterly​, the EAR for the deposit is ____​%. ​(Round to two decimal​ places.)

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents