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Nuwan has invested a $28,800 insurance settlement to earn interest at 3.2% compounded semi-annually for the next 10 years. If he then makes withdrawals of
Nuwan has invested a $28,800 insurance settlement to earn interest at 3.2% compounded semi-annually for the next 10 years. If he then makes withdrawals of $800 at the beginning of every three months from the investment for 20 years, what quarterly compounded nominal interest rate is earned during the withdrawal period? Do not include the dollar sign, $, in your answers. Do not include the comma usually used to denote thousands. Do not include the percent sign, %, in your answers. (a.) How much money is in the fund at the end of the deferral period? 38462.03 X (b.) What is the nominal annual rate of interest during the annuity period? (Hint: BGN must be up.) 1 * (Correct to exactly 4 decimal places.) (c.) What is the effective annual rate of interest? 1 X (Correct to exactly 4 decimal places.) (d.) What is the quarterly interest rate? (Hint: Divide the nominal, not the effective.) 1 * (Correct to exactly 4 decimal places.)
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