Problem 5 A man deposits P500 at the end of each year and expected to have an amount of P2,769.84 at the end of 5 years. 1. What is the nominal rate of interest if it is compounded annually? 2. What is the nominal rate of interest if it is compounded continuously? 3. Compute the equivalent compound amount factor if it is compounded continuously Ans. 1. 5.127% 2. 5% 3. 5.3968
Problem 5 A man deposits P500 at the end of each year and expected to have an amount of P2,769.84 at the end of 5 years. 1. What is the nominal rate of interest if it is compounded annually? 2. What is the nominal rate of interest if it is compounded continuously? 3. Compute the equivalent compound amount factor if it is compounded continuously Ans. 1. 5.127% 2. 5% 3. 5.3968
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
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Transcribed Image Text:Problem 5
A man deposits P500 at the end of each year and expected to have an amount of P2,769.84 at the
end of 5 years.
1. What is the nominal rate of interest if it is compounded annually?
2. What is the nominal rate of interest if it is compounded continuously?
3. Compute the equivalent compound amount factor if it is compounded continuously
Ans.
1. 5.127%
2. 5%
3. 5.3968
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