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Question: andnbsp you have just received a bonus of dollar15750 and...

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  You have just received a bonus of $15,750 and are looking to deposit the money in a bank for 5 years. You have investigated the annual deposit rate of several Australian banks and collected the following information: 

Bank

Annual rate

Compounding frequency

Commonwealth Bank of Australia

0.50%

Monthly

Westpac Banking Corporation

0.90%

Quarterly

Australia and New Zealand Banking Group

0.75%

Daily

National Australia Bank

0.80%

Annually

       i.        To determine which bank you should deposit your money in, calculate how much money you will earn at the end of 5 years at each bank. (round your answer to 2 decimal places).

 

      ii.        You understand that the more frequently interest is earned in each year, the more you will have at the end of your investment horizon. Is this always true? Discuss this statement considering your answer from the previous part.

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