Explanation Given: Investment is $ P . Accumulated amount is $ A . Time period is t years . Approach: Write the expression to obtain the effective rate of interest. r eff = ( 1 + r m ) m − 1 Here, r eff is the effective rate of interest, r is the nominal rate of interest, t is the time period and m is the number of periods in a year. Write the expression to obtain the accumulated amount when compounded in a specified period. A = P ( 1 + r m ) t×m Here, A is the accumulated amount when compounded in a specified period, P is the principal amount when compounded in a specified period, t is the time period m is the number of periods in a year and r is the rate of nominal rate of interest. Calculation: Consider the accumulated amount formula. A = P ( 1 + r m ) t×m [ ( 1 + r m ) m ] t

Finite Mathematics for the Managerial, Life, and Social Sciences, 11th Edition

11th Edition

ISBN: 9781285464657

Author: Soo T. Tan

Publisher: Brooks Cole

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Chapter 5.1, Problem 69E

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The effective rate (annual effective yield) is reff=(AP)1/t−1.

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Chapter 5.1, Problem 68E

Chapter 5.1, Problem 70E

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Chapter 5 Solutions

Finite Mathematics for the Managerial, Life, and Social Sciences, 11th Edition

Ch. 5.1 - Explain the difference between simple interest and...Ch. 5.1 - Prob. 2CQ Ch. 5.1 - Prob. 3CQ Ch. 5.1 - Prob. 1E Ch. 5.1 - Prob. 2E Ch. 5.1 - Find the accumulated amount at the end of 9months...Ch. 5.1 - Find the accumulated amount at the end of 8months...Ch. 5.1 - Prob. 5E Ch. 5.1 - A bank deposit paying simple interest at the rate...Ch. 5.1 - Prob. 7E

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