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For each of the cases in the following table, (EACH CASE A THROUGH D) a.Calculate the future value at the end of the specified deposit

For each of the cases in the following table, (EACH CASE A THROUGH D)

a.Calculate the future value at the end of the specified deposit period.

b.Determine the effective annual rate, EAR.

c.Compare the nominal annual rate, r, to the effective annual rate,

EAR.

What relationship exists between compounding frequency and the nominal and effective annual rates?

image text in transcribed

Case A B D Amount of initial deposit $2,700 $51,000 $1,200 $21,000 Nominal annual rate, r 7% 14% 6% 18% Compounding frequency, m (times/year) 3 6 2 3 | Deposit period (years) 7 3 12 7

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