(i) (ii) Calculate the annual force of interest that is equivalent to an effective rate of interest of 15.5% per 3 years. Consider that the nominal rate of interest is 3% per quarter-year payable monthly. Calculate the equivalent effective annual rate of interest. Calculate the nominal interest rate per annum convertible half-yearly that is equivalent to a nominal rate of interest of 5% per annum payable every other year.

(i) (ii) Calculate the annual force of interest that is equivalent to an effective rate of interest of 15.5% per 3 years. Consider that the nominal rate of interest is 3% per quarter-year payable monthly. Calculate the equivalent effective annual rate of interest. Calculate the nominal interest rate per annum convertible half-yearly that is equivalent to a nominal rate of interest of 5% per annum payable every other year.

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

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No tables, only formulas, please

correct answer; (i) ? = 0.048033??, (ii) ? = 0.12683??,
(iii) ?^(2) = 0.048227 ??

(i)
(ii)
Calculate the annual force of interest that is equivalent to an effective rate of
interest of 15.5% per 3 years.
Consider that the nominal rate of interest is 3% per quarter-year payable
monthly. Calculate the equivalent effective annual rate of interest.
(iii) Calculate the nominal interest rate per annum convertible half-yearly that is
equivalent to a nominal rate of interest of 5% per annum payable every other
year.

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