An investment pays you an annual 9% nominal interest rate compounded semiannually (4.5 percent twice a year). A second investment of equal risk has a different annual nominal interest rate but interest is compounded monthly (12 times a year). What nominal annual interest rate on the second investment would you have to receive to make you indifferent (same effective rate) between the two investments? Provide step by step Excel solution

Answer rating: 100% (QA)

To find the nominal annual interest rate on the second investment that would make you indifferent between the two investments you can set up an equati... View the full answer