(a) Consider a deposit of $1, earning a nominal interest of 12% pa, compounded monthly. Derive the formula for the amount, P, of a deposit that will earn the same amount of interest (i.e. the sum total of the entire interest earned) if P earns interest weekly at a nominal rate of 12% pa.


(b) Are the two amounts in part (a) equivalent? Give reason.

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a To derive the formula for the amount P of a deposit that will earn the same amount of interest Let... View the full answer