Derek can deposit $266.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month. Bank A pays 13.00% and compounds interest monthly. Derek can deposit $2,465.00 per year for the next 10 years into an account at Bank B. The first deposit will be made next year. Bank B compounds interest annually. What rate must Bank B pay for Derek to have the same amount in both accounts after 10 years? Submit Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434)) Show Hint
Derek can deposit $266.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month. Bank A pays 13.00% and compounds interest monthly. Derek can deposit $2,465.00 per year for the next 10 years into an account at Bank B. The first deposit will be made next year. Bank B compounds interest annually. What rate must Bank B pay for Derek to have the same amount in both accounts after 10 years? Submit Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434)) Show Hint
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 24P
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Transcribed Image Text:14 O
Derek can deposit $266.00 per month for the next 10 years into an account at Bank A. The first deposit will be made
next month. Bank A pays 13.00% and compounds interest monthly. Derek can deposit $2,465.00 per year for the next
10 years into an account at Bank B. The first deposit will be made next year. Bank B compounds interest annually. What
rate must Bank B pay for Derek to have the same amount in both accounts after 10 years?
Submit
Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal
format rounded to 6 decimal places (ex: 0.092434))
Show Hint
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