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37. A man is planning to make an annual deposit starting at the end of 1st year expecting to have savings worth 400,000 pesos after 10 years. However, due to certain circumstances, the first deposit of the same amount was made at the beginning of the fifth year and was terminated after the sixth deposit. As a result the accumulated amount after ten years is 50% less than what is expected. Assume that money is compounded annually. What is the nominal interest rate? A. 15.67% B. 12% C. 14.43% D. 17.65%

37. A man is planning to make an annual deposit starting at the end of 1st year expecting to have savings worth 400,000 pesos after 10 years. However, due to certain circumstances, the first deposit of the same amount was made at the beginning of the fifth year and was terminated after the sixth deposit. As a result the accumulated amount after ten years is 50% less than what is expected. Assume that money is compounded annually. What is the nominal interest rate? A. 15.67% B. 12% C. 14.43% D. 17.65%

Essentials Of Investments
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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37. A man is planning to make an annual deposit starting at the end of 1st year expecting to have savings worth 400,000 pesos after 10 years. However, due to certain circumstances, the first deposit of the same amount was made at the beginning of the fifth year and was terminated after the sixth deposit. As a result, the accumulated amount after ten years is 50% less than what is expected. Assume that money is compounded annually. What is the nominal interest rate? A. 15.67% В. 12% C. 14.43% D. 17.65%
Transcribed Image Text:37. A man is planning to make an annual deposit starting at the end of 1st year expecting to have savings worth 400,000 pesos after 10 years. However, due to certain circumstances, the first deposit of the same amount was made at the beginning of the fifth year and was terminated after the sixth deposit. As a result, the accumulated amount after ten years is 50% less than what is expected. Assume that money is compounded annually. What is the nominal interest rate? A. 15.67% В. 12% C. 14.43% D. 17.65%
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