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iogann1982 [59]
3 years ago
8

An investor can invest money with a particular bank and earn a stated interest rate of 6.60%; however, interest will be compound

ed quarterly. What are the nominal, periodic, and effective interest rates for this investment opportunity? Interest Rates Nominal rate Periodic rate Effective annual rate
Business
1 answer:
Snowcat [4.5K]3 years ago
3 0

Answer:

Effective annual rate is 16.31%.

Nominal Rate = 14%

Explanation:

Effective annual rate = [(1 + 15.40 / 4) ^ 4] - 1

= [(1 + 3.85%) ^ 4] - 1

= 1.1631 - 1

= 16.31%

Effective annual rate is 16.31%.

Solution for question 2

Nominal Rate = 14%

Effective annual rate = [(1 + 14 / 2) ^ 2] - 1

= [(1 + 7%) ^ 2] - 1

= 1.1449 - 1

= 14.49%

Effective annual rate is 14.49%.

Annual rate = 5%

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Answer:

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The best and most correct answer among the choices provided by the question are  the following:

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Hope my answer would be a great help for you.    If you have more questions feel free to ask here at Brainly.
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4 years ago
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