Question
Hayao is an investor looking to set up a fund to supplement his income. This fund will make ten annual payments of $10,000, the first
Hayao is an investor looking to set up a fund to supplement his income. This fund will make ten annual payments of $10,000, the first payment being 6 months from now. He has secured an account that will earn 6% p.a. compounding semi-annually.
Calculate the effective annual interest rate. Express your answer as a percentage.
Round your answer to the nearest whole number.
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Financial Management Principles and Applications
Authors: Sheridan Titman, Arthur J. Keown, John H. Martin
13th edition
134417216, 978-0134417509, 013441750X, 978-0134417219
