Consider a deposit into a savings account of £300 that accumulates to £322.78 in exactly one and a half year's time. (i) (ii) If the interest rate in the account is expressed as a simple rate, calculate the simple interest rate per annum. If the interest rate in the account is expressed as a compound rate, calculate the compound nominal interest rate per annum convertible monthly.
Consider a deposit into a savings account of £300 that accumulates to £322.78 in exactly one and a half year's time. (i) (ii) If the interest rate in the account is expressed as a simple rate, calculate the simple interest rate per annum. If the interest rate in the account is expressed as a compound rate, calculate the compound nominal interest rate per annum convertible monthly.
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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No tables, ONLY formulas, please,
correct answers; (i) ?′ = 0.050622??, (ii) ?^(12) = 0.048892??
Transcribed Image Text:Consider a deposit into a savings account of £300 that accumulates to £322.78 in exactly
one and a half year's time.
(i)
(ii)
If the interest rate in the account is expressed as a simple rate, calculate the
simple interest rate per annum.
If the interest rate in the account is expressed as a compound rate, calculate the
compound nominal interest rate per annum convertible monthly.
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