Miguel wanted to ensure that she had $75,000 for her child's university education. As soon as her child was born, she started saving $1,200 every 6 months in an investment fund. If she achieved her investment target on her child's 19th birthday, and she made no deposit on the child's 19th birthday, calculate the following: a. The nominal interest rate for the investment, compounded quarterly. % Round to two decimal places. b. Calculate the effective interest rate for this investment. % Round to two decimal places.
Miguel wanted to ensure that she had $75,000 for her child's university education. As soon as her child was born, she started saving $1,200 every 6 months in an investment fund. If she achieved her investment target on her child's 19th birthday, and she made no deposit on the child's 19th birthday, calculate the following: a. The nominal interest rate for the investment, compounded quarterly. % Round to two decimal places. b. Calculate the effective interest rate for this investment. % Round to two decimal places.
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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Kk.193.
Miguel wanted to ensure that she had $75,000 for her child's university education. As soon as her child was born, she started saving $1,200 every 6 months in an investment fund. If she achieved her investment target on her child's 19th birthday, and she made no deposit on the child's 19th birthday, calculate the following:
a. The nominal interest rate for the investment, compounded quarterly.
%
Round to two decimal places.
b. Calculate the effective interest rate for this investment.
% Round to two decimal places.
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