Question
3.2 #2. For each of the following (a, b, and c) combinations of interest rates, compounding frequencies and terms, find the value of i (the
3.2 #2. For each of the following (a, b, and c) combinations of interest rates, compounding frequencies and terms, find the value of i (the interest rate per period), and n (the number of periods) that would be used in the compound interest formula.
a. 8%, quarterly compounding, 10 years Also find the growth factor for 1 quarter, and the growth factor for the full 10 years (of quarterly compounding).
b. 9%, compounding monthly, 7 years Also find the growth factor for 1 month, and the growth factor for the full 7 years (of monthly compounding).
c. 15%, compounding semi-annually, 15 years Also find the growth factor for 1 half-year, and the growth factor for the full 15 years (of semi-annual compounding).
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