A Bank Pays 6% Annual Interest

question 197

Short Answer

A bank pays 6% annual interest. If $1000 is deposited in this bank account, find the amount in the account after 5 years if the interest is compounded weekly.

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Definitions:

Alpha

A measure of the active return on an investment, indicating how much a portfolio has outperformed or underperformed its benchmark index.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between the risk of a security and its expected return.

Expected Return

The anticipated value or profit that an investment is predicted to generate.

Benchmark Rate

The standard interest rate against which other borrowing or lending rates are measured, often set by central banks.