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Please solve the following problems. 1 - Suppose your bank account pays interest monthly with the interest rate quoted as an effective annual rate (EAR)
Please solve the following problems. 1 - Suppose your bank account pays interest monthly with the interest rate quoted as an effective annual rate (EAR) of 6%. What amount of interest will you earn each month? If you have no money in the bank today, how much will you need to save at the end of each month to accumulate $100,000 in 10 years? 2.Compute the present value of a risk-free three-year annuity of $500 per year, from the attached yield curve. Treasury Rates Term (Years) Rate 1 1 0.261% 2 0.723% 3 1.244%
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