Question

please show calculationd

5. If the nominal rate of interest is 9% and it is compounded monthly what rate of interest? (2 points) monthly what is the effective annual 6. If you invest 500 dollars at the beginning of each year how much will you have in 6 years if you earn 6% compounded weekly? (3 points)

Answer 1

Effective rate = [1+(nominal interest rate/n)]n - 1

Here, n is no. of times interest is compounding p.a.
5.7 Given - - Calculate Nominal mate = 9%. Compounded a monthly Effective Mate per annume. - soli Effective Interest the following Rate calculate by using formula : = il nominal Interest Rate - Here is no of times interest is compounded per annum. = (1+0.0075) - z (1.0075)2-1 -=_ _1:0938= _0.0938 og 9.38% per annum Effective gate = 9:38% ber annum

6. Given Investment = 500 $ each year. Rate of Interest = 6% 6.9: (weekly combonded) - Time = 6 years Soli Yece I yeces 2 year 3 year 4 year 5 year 6 + 500 (LE 0-06 252)' = 6308 = 630+500 (1 + 0.26)' = 1493-88 1423.8 +500 (1.26) = 24248 2424 +500 (1.26 = 3684.248 _3684-24 +560 (1:26)___= 5272.14 $ = 5272.14 +500 (1:26)_ = 7272-8954 $ at the end you of will 6th have $ 7 272.8964 year.