**Problem 1: Effective Interest Rate Calculation**Calculate the effective interest rate per 6 months given a nominal interest rate of 12% per year, compounded quarterly (every 3 months).**Problem 2: Present Worth Calculation**Determine the equivalent present worth (at time t = 0) of a uniform series of payments of $7000. The payments occur annually over 7 years, with the first payment starting 6 years from now. Assume a continuous compounding interest rate of 10% per year.

here we calculate the present worth and effective interest rate by using the given details , so…

What is the effective interest rate per 6 months for a nominal interest rate of 12% per year compounded every 3 months? Find the equivalent of present worth (t = 0) of a uniform series of $7000 for 7 years, if the payment is made every 12 months, starting 6 years from now. Assume the interest rate is 10% per year, compound continuously.

What is the effective interest rate per 6 months for a nominal interest rate of 12% per year compounded every 3 months? Find the equivalent of present worth (t = 0) of a uniform series of $7000 for 7 years, if the payment is made every 12 months, starting 6 years from now. Assume the interest rate is 10% per year, compound continuously.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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