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Updated on: 26 Oct 2023, 12:19
Originally posted by Sajjad1994 on 22 Jan 2020, 10:20.
Last edited by BottomJee on 26 Oct 2023, 12:19, edited 2 times in total.
Last edited by BottomJee on 26 Oct 2023, 12:19, edited 2 times in total.
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This table provides the standard interest rates offered by Central Bank for CDs, listed according to term offering and purchase amount. The interest rates listed are annual rates, compounded annually, to be paid when the CD comes to term. No bonuses or other adjustments are included.
$11,000 invested by a new customer in a 1-year CD.: No
$9,500 invested by a preferred customer in a 5-year CD.: No
$9,500 invested by a new customer in a 10-year CD.: Yes
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
49% (03:34) correct
51%
(03:42)
wrong
based on 657
sessions
History
Date
Time
Result
Not Attempted Yet
1. Determine whether each of the following investments will earn at least $250 of interest in its first year.
| Yes | No | |
| $11,000 invested by a new customer in a 1-year CD. | ||
| $9,500 invested by a preferred customer in a 5-year CD. | ||
| $9,500 invested by a new customer in a 10-year CD. |
ShowHide Answer
Official Answer
$11,000 invested by a new customer in a 1-year CD.: No
$9,500 invested by a preferred customer in a 5-year CD.: No
$9,500 invested by a new customer in a 10-year CD.: Yes
A new customer’s $20,000 1-year CD held for the complete term.: No
A new customer’s $4,000 5-year CD held for the complete term.: Yes
A preferred customer’s $10,000 2-year CD held for the complete term.: No
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
44% (02:44) correct
56%
(02:34)
wrong
based on 659
sessions
History
Date
Time
Result
Not Attempted Yet
2. Determine whether each of these transactions will, according to the new rules and rates described, yield a total interest payment of between $500 and $600.
| Yes | No | |
| A new customer’s $20,000 1-year CD held for the complete term. | ||
| A new customer’s $4,000 5-year CD held for the complete term. | ||
| A preferred customer’s $10,000 2-year CD held for the complete term. |
ShowHide Answer
Official Answer
A new customer’s $20,000 1-year CD held for the complete term.: No
A new customer’s $4,000 5-year CD held for the complete term.: Yes
A preferred customer’s $10,000 2-year CD held for the complete term.: No
Prior to the policy changes described, there were no penalties for early CD withdrawals.: No
Certain bank policies are designed to reward preferred customers for their loyalty.: No
If the bank accomplishes its stated intentions, it will likely pay a higher average (arithmetic mean) interest rate to customers than if it does not.: Yes
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
18% (01:20) correct
82%
(01:12)
wrong
based on 780
sessions
History
Date
Time
Result
Not Attempted Yet
3. Consider each of the following statements. Does the information in the memo and the table support the inference as stated?
| Yes | No | |
| Prior to the policy changes described, there were no penalties for early CD withdrawals. | ||
| Certain bank policies are designed to reward preferred customers for their loyalty. | ||
| If the bank accomplishes its stated intentions, it will likely pay a higher average (arithmetic mean) interest rate to customers than if it does not. |
ShowHide Answer
Official Answer
Prior to the policy changes described, there were no penalties for early CD withdrawals.: No
Certain bank policies are designed to reward preferred customers for their loyalty.: No
If the bank accomplishes its stated intentions, it will likely pay a higher average (arithmetic mean) interest rate to customers than if it does not.: Yes
Attachment:
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22 Jan 2020, 12:14
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1)a)No,since the interest is 11000(1+2.2/100)-11000= 242
b)No,the interest is 9500(1+2.5/100)-9500=237.5
c)Yes,the interest is 9500(1+2.8/100)-9500= 266
2)a)No,the interest is 20000(1+2.2/100)-20000=440
b)Yes,the interest is 4000(1+2.5/100)^5-4000=525.63
c)No,the interest is 10000(1+2.4/100)^2-10000=485.76
3)a)No,since for prior cases only revisions are done
b)No,not because of loyalty but on the basis of their purchase amounts
c)Yes,since the bonus of 0.1% is added,so overall the interest rate will increase
Posted from my mobile device
b)No,the interest is 9500(1+2.5/100)-9500=237.5
c)Yes,the interest is 9500(1+2.8/100)-9500= 266
2)a)No,the interest is 20000(1+2.2/100)-20000=440
b)Yes,the interest is 4000(1+2.5/100)^5-4000=525.63
c)No,the interest is 10000(1+2.4/100)^2-10000=485.76
3)a)No,since for prior cases only revisions are done
b)No,not because of loyalty but on the basis of their purchase amounts
c)Yes,since the bonus of 0.1% is added,so overall the interest rate will increase
Posted from my mobile device
07 Nov 2020, 06:54
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Sajjad1994, I have a doubt regarding the 3rd question.
The 1st point says that "Prior to the policy changes described, there were no penalties for early CD withdrawals.", I had already decided to select No but on scrolling up and reading the second paragraph of the General memo to employees of Central Bank, which says "We have also revised the schedule of penalties for early withdrawal and made these applicable to all new CDs." now the OA says no, but what I would like to point out is that if no withdrawal penalties existed then why have they used the term "revised the schedule of penalties". The term "revising" in my opinion indicates that the earlier schedule of payments has been updated.
Would love to know your and the other experts take on this.
Regards.
The 1st point says that "Prior to the policy changes described, there were no penalties for early CD withdrawals.", I had already decided to select No but on scrolling up and reading the second paragraph of the General memo to employees of Central Bank, which says "We have also revised the schedule of penalties for early withdrawal and made these applicable to all new CDs." now the OA says no, but what I would like to point out is that if no withdrawal penalties existed then why have they used the term "revised the schedule of penalties". The term "revising" in my opinion indicates that the earlier schedule of payments has been updated.
Would love to know your and the other experts take on this.
Regards.
