Answer to Question #59820 in Finance for Noja

Question #59820
1- You have just been promoted as the new assistant branch manager of a local-based international bank. The branch manager, who is an expatriate, has asked you a question on the different types of interest rate quotations. The question he asked is which rate should the bank advertise on monthly-compounded loans - the nominal annual percentage rate or the effective annual percentage rate? And which rate should the bank advertise on quarterly-compounded savings accounts? Please explain to the branch manager which quotation would attract consumers and why?
Expert's answer
If the question the manager asked is which rate should the bank advertise on monthly-compounded loans - the nominal annual percentage rate or the effective annual percentage rate, then as the effective annual percentage rate is much more higher, then the bank should advertise on the nominal annual percentage rate. And concerning the rate on quarterly-compounded savings accounts the bank should advertise on the effective annual percentage rate, because it is higher and more attractive for the customers who want to place a time deposit.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS
paypal