Mr Y invested R2000 in a bank for 7 years. The interest rate was 5% compounded weekly for the first 2 years, for the next 3 years, the interest was calculated at 7% compounded quarterly and for the remaining of the investment, the interest was 8% compounded semi-annually. (5) Nominal and effective interest rate 1.6. If the nominal rate of interest stated is 5% , what would the effective interest rate be if the compounding occurs annually, semi-annually, quarterly, monthly, weekly, and dailydaily.
Mr Y invested R2000 in a bank for 7 years. The interest rate was 5% compounded weekly for the first 2 years, for the next 3 years, the interest was calculated at 7% compounded quarterly and for the remaining of the investment, the interest was 8% compounded semi-annually. (5) Nominal and effective interest rate 1.6. If the nominal rate of interest stated is 5% , what would the effective interest rate be if the compounding occurs annually, semi-annually, quarterly, monthly, weekly, and dailydaily.
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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1.5. Mr Y invested R2000 in a bank for 7 years. The interest rate was 5% compounded weekly for the first 2 years, for the next 3 years, the interest was calculated at 7% compounded quarterly and for the remaining of the investment, the interest was 8% compounded semi-annually. (5) Nominal and effective interest rate
1.6. If the nominal rate of interest stated is 5% , what would the effective interest rate be if the compounding occurs annually, semi-annually, quarterly, monthly, weekly, and dailydaily.
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