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An insurance company earned a simple rate of interest of 7.9% over the last calendar year based on the following information: Assets, beginning of year
An insurance company earned a simple rate of interest of 7.9% over the last calendar year based on the following information:
Assets, beginning of year | 24,750,000 |
Sales revenue | X |
Net investment income | 2,040,250 |
Salaries paid | 2,200,000 |
Other expenses paid | 750,000 |
All cash flows, other than the investment income, occur at the middle of the year. The investment income is received at the end of the year.
Calculate the effective yield rate.
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