long term note payable for $100,000 pay back principal and 6% semi annual interest (annual interest compounded semi annually) 5 years on Jan 1 Year 6 I calculated the factor to be .74409 is that correct? Thank you Brenda

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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long term note payable for $100,000 pay back principal and 6% semi annual interest (annual interest compounded semi annually) 5 years on Jan 1 Year 6

I calculated the factor to be .74409 is that correct?

Thank you

Brenda

 

Expert Solution
Step 1: Factor calculation

Interest rate = 6% compounded semi annually

So, semi-annual rate = 3%

Similarly, time = 5 years

Semi-annual period = 10 

 

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