The proceeds from the sale of a $3500 four-year promissory note bearing interest at 5% compounded quarterly
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Question:
- The proceeds from the sale of a $3500 four-year promissory note bearing interest at 5% compounded quarterly were $3612.31. The note was discounted to yield 6.8% compounded semiannually. How many months before maturity was the note sold?
- Rounded to the nearest month, how long will it take money to lose 25% of its purchasing power if the annual rate of inflation is:
a) 2%?
b) 4%?
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