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A security with an annual nominal interest rate of 8.5% has a term of 3 years and is then redeemed at the nominal value of

A security with an annual nominal interest rate of 8.5% has a term of 3 years and is then redeemed at the nominal value of 100.

a) The price at an effective interest rate of 7.5% is to be determined.

b)The effective interest rate at a price of 102.60 is to be determined.

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