$3-51$ Mona Persian is considering a new investment fund with a semiannual interest rate of $2\mathrm{.}5\%.$ Any money she invests would have to be left in it for at least five years if she wanted to withdraw it without a penalty.

$($a$)$ What is the nominal interest rate?

$($b$)$ What is the annual effective interest rate?

$($c$)$ If Mona deposits $$10,000$ in the fund now, how much should it be worth in five years?

Contributed by Gillian Nicholls, Southeast Missouri

State University

Note: do not use a semi$-$annual interest rate of $2\mathrm{.}5\%$ as

described in problem $3-51$

Consider problem $3-51.$ Instead of using a semi$-$annual interest rate of $2\mathrm{.}5\%,$ solve the problem using an annual interest rate of $12\%$ compounded quarterly.

What is the nominal interest rate?Blank $1$

$-$What is the annual effective interest rate?

Blank $2$

$-$What is the effective interest rate per quarter?

Blank $3$

If Mona deposits $$15,000$ in the funds now, how much should it be worth in five years?

Blank $4$