Your grandmother asks for your help in choosing a certificate of deposit (CD) from a...
70.2K
Verified Solution
Link Copied!
Question
Finance
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 5.45 percent APR compounded daily, while the second certificate of deposit, CD #2, pays 5.50 percent APR compounded annually. What is the effective annual rate (the EAR) of each CD, and which CD do you recommend to your grandmother?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
