Question
You are going to invest $15,000 today and receive $87,000 in 11 years. a) What quarterly interest rate should the bank offer to you
You are going to invest $15,000 today and receive $87,000 in 11 years. a) What quarterly interest rate should the bank offer to you to meet your demand? (Bank will pay interest quarterly) b) What is the annual percentage rate? c) What is the effective annual rate?
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Step: 1
a To find the quarterly interest rate we can use the formula FV PV1rnnt where FV is the future value ...Get Instant Access to Expert-Tailored Solutions
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Fundamentals of Investments Valuation and Management
Authors: Bradford D. Jordan, Thomas W. Miller
5th edition
978-007728329, 9780073382357, 0077283295, 73382353, 978-0077283292
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