11. You can deposit your savings at the Darlington National Bank, which offers to pay 12.6 percent interest compounded monthly, or at the Bartlett Bank, which will pay interest of 11.5 percent compounded daily. (Assume 365 days in a year.) Which bank offers the higher effective annual rate? (Points : 5)
Darlington National Bank.
Both banks offer the same effective rate.
Cannot be determined from the information provided.
Workable only if the banks use the same compounding period.
12. Your company is planning to borrow $1,000,000 on a 5-year, 15 percent, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal? (Points : 5)
13. Sarah is thinking about purchasing an investment from HiBond Investing. If she buys the investment, Sarah will receive $100 every three months for five years. The first $100 payment will be made as soon as she purchases the investment. If Sarah's required rate of return is 16 percent, to the nearest dollar, how much should she be willing to pay for this investment? (Points : 5)
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