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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Changing compounding frequency Using annual, semiannual, and quarterly compounding periods, (1) calculate
the future value if $9,000 is deposited initially at 11% annual interest for 5 years, and (2) determine the effective
annual rate (EAR).
Annual Compounding
(1) The future value, FV. is $
(Round to the nearest cent.)
(2) If the 11% annual nominal rate is compounded annually, the EAR is%. (Round to two decimal places)
Semiannual Compounding
(1) The future value, FV, is $ (Round to the nearest cent)
(2) If the 11% annual nominal rate is compounded semiannually, the EAR is % (Round to two decimal places)
Quarterly Compounding
(1) The future value, FV. is $ (Round to the nearest cent.)
(2) If the 11% annual nominal rate is compounded quarterly, the EAR is%. (Round to two decimal places.)
4
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Transcribed Image Text:Changing compounding frequency Using annual, semiannual, and quarterly compounding periods, (1) calculate the future value if $9,000 is deposited initially at 11% annual interest for 5 years, and (2) determine the effective annual rate (EAR). Annual Compounding (1) The future value, FV. is $ (Round to the nearest cent.) (2) If the 11% annual nominal rate is compounded annually, the EAR is%. (Round to two decimal places) Semiannual Compounding (1) The future value, FV, is $ (Round to the nearest cent) (2) If the 11% annual nominal rate is compounded semiannually, the EAR is % (Round to two decimal places) Quarterly Compounding (1) The future value, FV. is $ (Round to the nearest cent.) (2) If the 11% annual nominal rate is compounded quarterly, the EAR is%. (Round to two decimal places.) 4
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