Your late grandmother has left you a biannual allowance of €5000 paid twice a year at the end of June and at the end of December for exactly 30 years (total undiscounted amount of €300,000; first payment received in exactly 6 months). The "Students Association Bank" (SAB) is willing to buy your annuity for €138,377.82. What is biannual interest rate that the bank charges on this loan? What is the effective annual interest rate?

Answer rating: 100% (QA)

To find the biannual interest rate charged by the bank and the effective annual interest rate we can ... View the full answer