Your company has decided to set up a fund for its employees with an initial payment of Rs 27,500 compounded six-monthly over a four-year period at a six monthly interest of 3.5%.(a) Calculate the size of the fund at the end of 4 years.(b) Calculate the effective annual interest rate.iv) Show that P = A/r. for an ordinary annuity to infinity.
Your company has decided to set up a fund for its employees with an initial payment of Rs 27,500 compounded six-monthly over a four-year period at a six monthly interest of 3.5%.(a) Calculate the size of the fund at the end of 4 years.(b) Calculate the effective annual interest rate.iv) Show that P = A/r. for an ordinary annuity to infinity.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Your company has decided to set up a fund for its employees with an initial payment of Rs 27,500 compounded six-monthly over a four-year period at a six monthly interest of 3.5%.
(a) Calculate the size of the fund at the end of 4 years.
(b) Calculate the effective annual interest rate.
iv) Show that P = A/r. for an ordinary
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