Thursday
April 24, 2014

Homework Help: Bus Finance

Posted by allison on Friday, February 3, 2012 at 7:43pm.

I have inherited $40,000. I want to save it for 5 years to make down payment on new home. I get info from two diff banks.
Bank A - 5.78% APR with semi annual compounding. Bank B - 5.75% APR with daily compounding.
Which bank would you use to maximize your return?
For Bank A - I did .0578*2=1.156. 2P/YR 1.156 NOM% shift EFF% = 1.16.
400000PV 5N 1.16 I/YR FV 41173.53.
Bank B - .0575*365=20.99 365P/YR 20.99 NOM% EFF% = 23.35
400000PV 5N 23.35 I/YR FV 40128.11
BANK A seems to be get higher yield if I did these correctly

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

finance - You want to save $1,000,000 for your retirement (under 40 years old) ...
Bus Finance - You want to purchase a home. cost $165,000. you have $40,000 ...
personal finance - if you wanted to save $ 50,000 to have it available in ...
Bus Finance - You want to purchase a home. cost $165,000. you have $40,000 ...
finance (math) - If you inherited $25,000 today and invested all of it in a ...
Corporate Finance - Your firm is looking at 3 projects, each costing $500,000: A...
Math - If you finance $50,000 of the purchase of your new home at 4.40% ...
Finance - If I have $40,000 of pre-tax what are the differences between $1,000 ...
finance - A corporationís pretax net income of $1,000,000 is taxable based on 30...
Finance - Suppose that you want to purchase a home for $450,000 with a 30 year ...

Search
Members