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1.Bright Star Bank pays a nominal annual (quoted) interest rate of 7.47 percent, compounded quarterly on your savings account. Calculate the effective annual rate, or
1.Bright Star Bank pays a nominal annual (quoted) interest rate of 7.47 percent, compounded quarterly on your savings account. Calculate the effective annual rate, or EAR (annual percentage yield).
2. An investment will pay $100 two years from now, $808 four years from now, and $1,906 five years from now. You are going to reinvest these cash flows at a rate of 8.32 percent per year. What is the future value of this investment at the end of year five?
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