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A bank offers a nominal annual interest rate of 8% for a new savings account. (i) What is the effective rate when compounded quarterly? Draw

A bank offers a nominal annual interest rate of 8% for a new savings account.

(i) What is the effective rate when compounded quarterly? Draw the cash flow diagram.

(ii) If you want to build $500,000 in savings in 2 years, what quarterly annuity must be made? Draw the cash flow diagram.

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