Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You are given a loan on which interest is charged over a 4-year period, as follows:
i. an effective rate of discount of 6% for the first year;
ii. a nominal rate of discount of 4% compounded quarterly for the second year;
iii. a nominal rate of interest of 5% compounded semiannually for the third year; and
iv. a force of interest of 5% for the fourth year.
Calculate the annual effective rate of interest over the 4-year period.
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