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2a) For each of the following transactions calculate the annual effective rate of interest applying: 300 invested for 18 months to give 350 150
2a) For each of the following transactions calculate the annual effective rate of interest applying: 300 invested for 18 months to give 350 150 invested for 24 months and another 150 invested for 12 months (starting 12 months after the first investment) to give a total of 350 100 invested at the start if each of the next 6 months to give 650 at the end of the year. 2b)For each of the following calculate the equivalent effective annual rate of interest: An effective rate of interest of 12.7% paid after two years; An effective rate of discount of 5.75% p.a.; A force of interest of 0.5% per month; A nominal rate of discount of 6% p.a. convertible quarterly; A rate of interest of 6% p.a. convertible every two years; 175 paid immediately in lieu of 100 due both in 12 and 24 months time.
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