A bank pays 5% with daily compounding on its savings accounts. Should it advertise the nominal or effective rate if it is seeking to attract new deposits?

It should advertise the EFFECTIVE RATE

Explanation:

Based on the information given we were told that the bank pay 5% on a saving account that is daily compounded which means that if they are seeking to attract new deposits from their customers they should advertise the EFFECTIVE RATE reason been that the higher an amount or saving amount is been compounded annually the higher the effective rate will be which will inturn lead it to exceed the nominal rate.

Therefore they should go ahead an advertise the EFFECTIVE RATE because the rate is more higher than nominal rate.

answertop managers;

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.