Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Cost of Credit
The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are…
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A sum of $100,000 was invested into an account for six months. An amount equal to $120,000 was received every six months. If interest is compounded continuously, compute the nominal rate of interest and the effective rate of interest.

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Step 1: Calculation of Nominal rate of interest
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