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Time Value of Money: Comparing Interest Rates Quantitative Problem: Bank 1 lends funds at a nominal rate of 8% with payments to be made semiannually.
Time Value of Money: Comparing Interest Rates
Quantitative Problem: Bank 1 lends funds at a nominal rate of 8% with payments to be made semiannually. Bank 2 requires payments to be made quarterly. If Bank 2 would like to charge the same effective annual rate as Bank 1, what nominal interest rate will they charge their customers? Round your answer to three decimal places. Do not round intermediate calculations.
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