Find two cases of life insurance fraud. Write a paragraph for each one explaining the details given. (how was the fraud committe
1 answer:
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Answer:
Bank A should be chosen.
Explanation:
Given:
Effective annual rate (EAR) of bank A = 10%
Bank B pays 9% compounded daily. EAR of bank B is calculated below:
EAR =
Where, i is 0.09
n is compounding period that is 365 (since it is compounded daily)
EAR =
= 1.0942 - 1
= 0.0942 or 9.42%
Bank B pays EAR of 9.42%
Based on EAR, Bank A should be selected as it pays higher EAR of 10%.