Thursday

October 23, 2014

October 23, 2014

Posted by **fawn** on Tuesday, January 8, 2013 at 8:56pm.

Two competing bank are trying to attract customers.

(a) Ally Bank has an account which earns 25% interest every 10 years. Assuming the interest is compounded weekly, find both the nominal and effective annual interest rates.

(b) Patriot Bank has a continuously compounded account with 3% interest. If 100 dollars is deposited in the account at Ally Bank and 70 is deposited in the account at Patriot Bank, exactly how long will it take for the money in the two accounts to be equal?

- math -
**Jennifer**, Wednesday, January 9, 2013 at 8:17pmN = (1 + E)^12 -1

where N is the nominal interest rate per year; and E is the effective monthly interest rate per year.

For Ally Bank,

(N+1)^10 = 1.25

Use this equation to solve for N:

N+1 = log10(1.25)

N = log10(1.25) - 1

Then use the first equation to find E

**Answer this Question**

**Related Questions**

Walk Two Moons - Ahh, havn't been on this forever! I have a question about the ...

statistics - The First National Bank of Wilson has 680 checking account ...

math - solve the polynomial inequality and graph the solution set on a real ...

Math - I've been staring at this problem for an hour and have NO IDEA WHAT TO DO...

Accounting - On Aug 14th, One of our Partner's ( Compuville ) cash book showed a...

math help-emergency - I've been trying this alooot of times and couldn't get ...

:( math - 3x (x-3)^3 - x (x-3)^2 ps. I am staring at this problem for a long tym...

IPC - i dont have a book or anything to go look all this stuff up so i really ...

PHY - It is said that unlike charges attract. You should have observed that ...

Literature - What is scope in literature? I've been searching for this forever ...