Vanscoy Bank pays 6.6% simple interest on its investment accounts. If Vade Bank pays interest on its accounts compounded annually, what rate should the bank set if it wants to match Vanscoy Bank over an investment horizon of 8 years?
Vanscoy Bank pays 6.6% simple interest on its investment accounts. If Vade Bank pays interest on its accounts compounded annually, what rate should the bank set if it wants to match Vanscoy Bank over an investment horizon of 8 years?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 3STP
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Vanscoy Bank pays 6.6% simple interest on its investment accounts. If Vade Bank pays interest on its accounts compounded annually, what rate should the bank set if it wants to match Vanscoy Bank over an investment horizon of 8 years?
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