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Bill purchases an annuity at a price of 9,000. The annuity makes payments of 475 at the beginning of every 6 months for 18 years.
Bill purchases an annuity at a price of 9,000. The annuity makes payments of 475 at the beginning of every 6 months for 18 years. The payments are reinvested in a fund a which earns interest at an annual effective rate i. Interest payments are received every 6 months and reinvested at a nominal rate of 8% convertible semiannually. Bill realizes an overall effective annual yield of 10% on his original investment over the 18-year period. Calculate i. (5.a-c #08] O 13.95% 12.8% 13.18% O 14.33% O 13.56%
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