Sal invests a total of

$10,000

. He uses part of it to purchase an annuity with payments of

$1,000

at the beginniing of each year for ten years. The purchase price of the annuity is based on an effective interest rate of

8%

. As annuity payments are received, they are reinvested at an annual effective interest rate of

7%

. The balance of Sal's

$10,000

is invested in a ten-year certificate of deposit with a nominal annual interest rate of

9%

convertible quarterly.\ Calculate the annual effective yield on the entire

$10,000

investment over the 10-year period.\ A)

3.98%

\ B)

6.59%

\ C)

7.22%

\ D) The answer does not appear here\ E)

6.68%

\ F)

7.95%

Sal invests a total of $10,000. He uses part of it to purchase an annuity with payments of $1,000 at the beginniing of each year for ten years. The purchase price of the annuity is based on an effective interest rate of 8%. As annuity payments are received, they are reinvested at an annual effective interest rate of 7%. The balance of Sal's $10,000 is invested in a ten-year certificate of deposit with a nominal annual interest rate of 9% convertible quarterly. Calculate the annual effective yield on the entire $10,000 investment over the 10 -year period. A) 3.98% B) 6.59% C) 7.22% D) The answer does not appear here E) 6.68% F) 7.95%