б. ( You are given a loan on which interest is charged over a 4-year period, as follows: i. an effective rate of discount of 6% for the first year; ii. a nominal rate of discount of 4% compounded quarterly for the second year; iii. a nominal rate of interest of 5% compounded semiannually for the third year; and iv. a force of interest of 5% for the fourth year. Calculate the annual effective rate of interest over the 4-vear period.

б. ( You are given a loan on which interest is charged over a 4-year period, as follows: i. an effective rate of discount of 6% for the first year; ii. a nominal rate of discount of 4% compounded quarterly for the second year; iii. a nominal rate of interest of 5% compounded semiannually for the third year; and iv. a force of interest of 5% for the fourth year. Calculate the annual effective rate of interest over the 4-vear period.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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