Question

Find the effective rate which is equivalent to 16%
compounded semiannually.​

Answer 1

Step-by-step explanation:

The formula and calculations are as follows: Effective annual interest rate = (1 + (nominal rate / number of compounding periods)) ^ (number of compounding periods) - 1.

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More Frequent Compounding Equals Higher Returns

Semi-annual = 10.250%

Quarterly = 10.381%

Monthly = 10.471%

Daily = 10.516%

Find the present worth of a future payment of 80,000 to be made in 6 years with an interest of 12% compounded annually. The effective rate corresponding to 18% compounded daily is 19.72%. What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360 days.

Answer 2

Answer:

Step-by-step explanation: