Calculate, to 5 decimal places, the annual nominal rate of interest convertible quarterly that is equivalent to the following: (i) A nominal rate of interest of 6% per annum convertible half-yearly; (ii) A nominal rate of discount of 7% per annum convertible every second year.
Calculate, to 5 decimal places, the annual nominal rate of interest convertible quarterly that is equivalent to the following: (i) A nominal rate of interest of 6% per annum convertible half-yearly; (ii) A nominal rate of discount of 7% per annum convertible every second year.
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
Problem 1PS
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Transcribed Image Text:Calculate, to 5 decimal places, the annual nominal rate of interest convertible quarterly that is
equivalent to the following:
(i) A nominal rate of interest of 6% per annum convertible half-yearly;
(ii) A nominal rate of discount of 7% per annum convertible every second year.
(iii) An effective rate of interest of 0.5% per month;
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correct answers are:
(i) i(4) = 0.05956 pa
(ii) i(4) = 0.07613 pa
(iii) i(4) = 0.06030 pa
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