First National Bank pays 7.2% interest compounded semiannually. Second National

Question

First National Bank pays 7.2% interest compounded semiannually. Second National Bank pays 6% interest, compounded monthly.

Calculate the future value for each dollar invested in First National (Assume you invest $1). (Do not round intermediate calculations. Round your answer to 5 decimal places.)

Calculate the future value for each dollar invested in Second National (Assume you invest $1). (Do not round intermediate calculations. Round your answer to 5 decimal places.)

First National Bank pays 7.2% interest compounded semiannually. Second National Bank pays 6% interest, compounded monthly.

Explanation / Answer

(a)

FV= 1x1.036^2= $1.07330

(b)

FV= 1x1.005^12= $1.06168

(c) First National Bank

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