Problem: Sonia needs her house repainted, but it will cost $14 000. A company offers to paint it provided she pays 10% deposit and 10% p.a. simple interest on the balance. If she agrees to equal monthly repayments over 2 years:
(a) How much are the monthly repayments?
(b) How much extra did Sonia pay by agreeing to this deal?
Below are the nominal interest rates offered by 3 major banks?
Bank A:
Bank B:
Bank C:
8.75% p.a. compounding quarterly
8.70% p.a. compounding fortnightly
8.65% p.a. compounding daily
Calculate the effective interest rates for each and determine which bank you would be best to invest with.