3.24 A sum of $120,000 now at an interest rate of 10% per year compounded semiannually is equivalent to how much money 6 years ago? Solve using tabulated factors in two ways: using the effective annual rate and the effective semiannual rate.

3.24 A sum of $120,000 now at an interest rate of 10% per year compounded semiannually is equivalent to how much money 6 years ago? Solve using tabulated factors in two ways: using the effective annual rate and the effective semiannual rate.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3.24 A sum of $120,000 now at an interest rate of 10% per year
compounded semiannually is equivalent to how much money
6 years ago? Solve using tabulated factors in two ways:
using the effective annual rate and the effective semiannual
rate.

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Step 2: Determine the equivalent value at 6 year ago using effective annual interest rate:

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Step 3: Determine the equivalent value at 6 year ago using semiannual interest rate:

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