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Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Please help me fast so that I will give good rating.

Find i (the rate per period) and n (the number of periods) for the following loan at the given annual rate.
Semiannual payments of $4,000 are made for 17 years to repay a loan at 5.9% compounded semiannually.
i= (Type an integer or decimal rounded to four decimal places as needed.)
n=
Transcribed Image Text:Find i (the rate per period) and n (the number of periods) for the following loan at the given annual rate. Semiannual payments of $4,000 are made for 17 years to repay a loan at 5.9% compounded semiannually. i= (Type an integer or decimal rounded to four decimal places as needed.) n=
Expert Solution
Step 1

Formula for compound interest is:

A = P[(1+r/n)^nt]

Where A is the future amount

P is the principal

r is the rate of interest, n is the no of compounding periods & t is the duration

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