No SIM e 3:47 PM 57561 a kennesaw.view.usg.edu Save Question 8 (10 points) d An

Question

No SIM e 3:47 PM 57561 a kennesaw.view.usg.edu Save Question 8 (10 points) d An interest rate of 1% per month is equivalent to what effective rate per 2 months? ) i 2.01% i-3.5% ) i # 4.8% i 1.7% Save Question 9 (10 points) d Determine the F/P factor for 3 years at an interest rate of 8% per year, compounded quarterly. F/P: 1.2190 F/P-1.2434 F/P= 1.2936 F/P= 1.2682 Save d Question 10 (10 points) Determine the P/G factor for 5 years at an effective interest rate of 6% per year, compounded semiannually.

Explanation / Answer

8. Interest rate of 1? per month also can be written as (1? * 2) = 0.02 per 2 months.

Effective interest rate, i = [ 1+(r/m)]m - 1

Here, r = nominal interest rate per 2 months = 0.02

m = no. Of compounding periods per 2 months = 2

Therefore, i = [ 1+(0.02/2)]2 - 1 = (1.01)2 - 1 = 0.0201 = 2.01?

Answer: i = 2.01?

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.