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2 (a) Consider a banking investment where a COMPOUNDED return is paid on a semi-annual basis (twice a year). The compounding of the interest is
2 (a) Consider a banking investment where a COMPOUNDED return is paid on a semi-annual basis (twice a year). The compounding of the interest is pursued on a weekly basis (52 weeks per year). If the nominal interest rate for the compounding interest scheme is 790, determine the etfective weekly interest rate and the FINAL WORTH of the cash flow project (after 5 years). Assume the Annuity at every payment period is 1000 Riyals. (5 points) (b) Consider if the scheme is conducted on a CONTINOUS COMPOUNDING AND CONTINOUS FLOW basis with 12 interest periods, annually. Assuming, nominal interest rate of 7 % and monthly payments (1000 Riyals), determine the FINAL WORTH of the cash flow after a period of 32 months. (5 points)
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