The effective annual interest rate is 15%. A) What is the effective interest rate for two years (accumulated over 2 years with interest over interest)? B) What is the effective interest rate for ten years (accumulated over 10 years with interest over interest)? C) Assume interest is compounded monthly. What is the monthly interest rate? D) What is the simple annual interest rate? E) What is the simple interest rate for 2 years? For 10 years?

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
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I am submitting this again because I got two different answers from Bartleby on C, D, and E.

  1. The effective annual interest rate is 15%.

A) What is the effective interest rate for two years (accumulated over 2 years with interest over interest)?

B) What is the effective interest rate for ten years (accumulated over 10 years with interest over interest)?

C) Assume interest is compounded monthly. What is the monthly interest rate?

D) What is the simple annual interest rate?

E) What is the simple interest rate for 2 years? For 10 years?

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