Question
You invest $100 for 1 year at an annual rate of 8%. Interest is paid semiannual, i.e. 4% after 6 month and 4% at maturity.
You invest $100 for 1 year at an annual rate of 8%. Interest is paid semiannual, i.e. 4% after 6 month and 4% at maturity.
A. What is the total interest received?
B. If you assume that the 1st semiannual interest payment is reinvested until maturity at the interest rate, what is total amount of interest received?
Please show all work
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Guide To Finance Theory And Application Portfolio Mathematics
Authors: Professional Risk Managers' International Association (PRMIA)
1st Edition
0071731814
