1) Alisha invests 5,000 into an account. The effective monthly interest rate is .25% for the first six months, .5% for the next year, and .75% for the next six months. Find the amount Alisha has in the account after two years, and find the average compound monthly interest rate (i.e. the equivalent effective monthly interest rate) for the two year period. Finally, find the average yearly interest rate (i.e. the equivalent effective annual interest rate) for the two year period.

1) Alisha invests 5,000 into an account. The effective monthly interest rate is .25% for the first six months, .5% for the next year, and .75% for the next six months. Find the amount Alisha has in the account after two years, and find the average compound monthly interest rate (i.e. the equivalent effective monthly interest rate) for the two year period. Finally, find the average yearly interest rate (i.e. the equivalent effective annual interest rate) for the two year period.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 4FPE: Calculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five...

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