A chartered bank offers a five-year Escalator Guaranteed Investment Certificate.In successive years it pays annual interest rates of 4%, 4.5%, 5%, 5.5%, and 6%, respectively, compounded at the end of each year. The bank also offers regular five-year GICs paying a fixed rate of 5% compounded annually. Calculate and compare the maturity values of $1000 invested in each type of GIC. (Note that 5% is the average of the five successive one-year rates paid on the Escalator GIC.) Choose the correct choice from the following answers
A) 1276.28 B) 1276.22 C) 1276.29 D) 1276.21 E) 1276.23
Explanation:   FV = $1000(1.04)(1.045)(1.05)(1.055)(1.06) = $1276.14   the maturity value of the regular GIC is   FV = $= $1276.28   1276.28nswer: 1276.28) 1276.28
<result>A</result>
A chartered bank offers a five-year Escalator Guaranteed Investment Certificate.In successive years it pays annual interest rates of 4%, 4.5%, 5%, 5.5%, and 6%, respectively, compounded at the end of each year. The bank also offers regular five-year GICs paying a fixed rate of 5% compounded annually. Calculate and compare the maturity values of $1000 invested in each type of GIC. (Note that 5% is the average of the five successive one-year rates paid on the Escalator GIC.)