Given a nominal rate of interest r = 8 percent, as in Problem 11.25, find the effective

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Given a nominal rate of interest r = 8 percent, as in Problem 11.25, find the effective rate of interest under

(a) semiannual,

(b) quarterly, and

(c) continuous compounding. Note that in (11.14) and

(11.15) time t and principal P do not matter. image text in transcribed

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Schaum S Outline Of Mathematical Methods For Business Economics And Finance

ISBN: 978-1264266876

2nd Edition

Authors: Luis Moises Pena Levano

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Question Posted: Sep 20, 2024 06:03 AM

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Given a nominal rate of interest r = 8 percent, as in Problem 11.25, find the effective

Question:

(a) From (11.14), Substituting, re=(1+)-1 == (1 + ==-) " - re= .08 = (1+-28) - -1 = (1+.04) - 1 re 1.08160-1 = 0.08160 = 8.16% 4 (b) (c) From (11.15), Substituting, F= (1+-08) *. -1 = (1+.02)4-1 le= 4 re 1.082431 = 0.08243 8.24% re=e" - 1 == re=e0.08 11.08329-1 = 0.08329 8.33%

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Schaum S Outline Of Mathematical Methods For Business Economics And Finance

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