that pays a (b) What is unc 4.7.If a bank advertises a savings account 6% nomina
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that pays a (b) What is unc 4.7.If a bank advertises a savings account 6% nominal interest rate compounded continuously? what is the effective annual percentage rate? 8. The Toyota Motor Company is advertising a 24-month lease of a 2014 Camry for S189 payable at the beginning of each month. The lease requires a $2,399 down payment plus first month payment. No security deposit is required. Lessee pays mainte- nance, excess wear and tear, and $0.18 per mile over 12,000 miles per year. Lease-end purchase option is $17.784 and lease payments total $4,536. A disposi- tion fee of $350 is due at lease-end. Assuming an interest rte of 6% compounded monthly, what is the total cost of leasing if you put 40,000 miles at the end of lease? 2 9. You have three choices in placing your money in a bank account. Bank A pays 6.12% compounded annually. Bank B pays 6.00% compounded quarterly. Bank C pays 5.90% compounded continuously. Which bank would you open an account with? The APR is stated as 6% compounded monthly. What is the continuously compounded rate? (In other words, what APR at continuous compounding has the same effect?) 4.11. Bank A offers a nominal annual interest rate of 5% compounded daily, while Bank B offers con- tinuous compounding at a 4.6% nominal annual rate. If you deposit $3,000 with each bank, what will be the difference in the two bank account balances after two years?Explanation / Answer
Dear student, only one question is allowed at a time. I am answering the first question
Continuously compounded interest rate
= e ^ r x t - 1
Where,
e = Mathematical constant e = 2.71828
r = Rate of interest = 6% or 0.06
t = Time period = 1 year
So, Annual interest rate
= 2.71828 ^ 0.06 x 1 - 1
= 2.71828 ^ 0.06 - 1
= 1.0618 – 1
= 0.0618 or 6.18%
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