Question
The following table shows the spot rates of interest over a number of horizons: Period of Investment(years) Spot Rate(%) 1 5.00 2 6.00 3 7.50
The following table shows the spot rates of interest over a number of horizons:
| Period of Investment(years) | Spot Rate(%) |
| 1 | 5.00 |
| 2 | 6.00 |
| 3 | 7.50 |
| 4 | 8.00 |
(a) Find the present value of payments of $100 at the end of each year for 4 years.
(b) What is the effective rate of interest earned by this annuity-immediate if it were constant through the whole investment period>
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The Psychology Of Trading Tools And Techniques For Minding The Markets
Authors: Brett N. Steenbarger
1st Edition
0471267619, 9780471267614
