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The nominal rate of discount per annum convertible monthly is 5.5%. (i) Calculate, giving all your answers as a percentage to three decimal places: (a)
The nominal rate of discount per annum convertible monthly is 5.5%. (i) Calculate, giving all your answers as a percentage to three decimal places: (a) the equivalent force of interest. (b) the equivalent effective rate of interest per annum. (c) the equivalent nominal rate of interest per annum convertible monthly. (12 marks (ii) Explain why the nominal rate of interest per annum convertible monthly calculated in part (i)(c) is less than the equivalent annual effective rate of interest calculated in part (i)(b) [2 marks] Calculate, as a percentage to three decimal places, the effective annual rate of discount offered by an investment that pays RM159 in eight years' time in return for RM100 invested now. [3 marks) (iv) Calculate, as a percentage to three decimal places, the effective annual rate of interest from an investment that pays 12% interest at the end of each two-year period. (3 marks) The nominal rate of discount per annum convertible monthly is 5.5%. (i) Calculate, giving all your answers as a percentage to three decimal places: (a) the equivalent force of interest. (b) the equivalent effective rate of interest per annum. (c) the equivalent nominal rate of interest per annum convertible monthly. (12 marks (ii) Explain why the nominal rate of interest per annum convertible monthly calculated in part (i)(c) is less than the equivalent annual effective rate of interest calculated in part (i)(b) [2 marks] Calculate, as a percentage to three decimal places, the effective annual rate of discount offered by an investment that pays RM159 in eight years' time in return for RM100 invested now. [3 marks) (iv) Calculate, as a percentage to three decimal places, the effective annual rate of interest from an investment that pays 12% interest at the end of each two-year period
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