I am having trouble solving this math problem:
A certificate of deposit (CD) is an agreement between a bank and a saver in which the bank guarantees an interest rate and the saver commits to leaving his or her deposit in the account for an agreed-upon period of time.
First National Bank offers two-year CDs at 9.14% compounded daily, and Citywide Savings offers two-year CDs at 9.15% compounded quarterly. Compute the annual yield for each institution.
I have computed (1+r*1)=(1+.0914/24)^12 and get .0953 but I think this problem is wrong. Can someone help me to understand this problem better? I do not want to work on the Citywide Savings problem until I understand the first National Bank problem. Any help would be greatly appreciated.
A certificate of deposit (CD) is an agreement between a bank and a saver in which the bank guarantees an interest rate and the saver commits to leaving his or her deposit in the account for an agreed-upon period of time.
First National Bank offers two-year CDs at 9.14% compounded daily, and Citywide Savings offers two-year CDs at 9.15% compounded quarterly. Compute the annual yield for each institution.
I have computed (1+r*1)=(1+.0914/24)^12 and get .0953 but I think this problem is wrong. Can someone help me to understand this problem better? I do not want to work on the Citywide Savings problem until I understand the first National Bank problem. Any help would be greatly appreciated.