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Q 2. (a) Define effective interest rates and prove that r= 1+-1 -1. - (b) If saving account awards interest of 3 percent per year

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Q 2. (a) Define effective interest rates and prove that r= 1+-1 -1. - (b) If saving account awards interest of 3 percent per year compounded semiannually, what amount must be deposited today in order to accumulate $2000 after 10 years? How much interest will be earned during theses 10 years? (5+5)

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