1. A man wishes to bequeath to his daughter P50T 15 yrs from now. What amount should he invest now if it will earn interest of 10% compounded semi-annually during the first 10 yrs & 12% compounded quarterly during the next 5yrs? 2. Find the nominal rate compounded quarterly which is equivalent to 12% compounded monthly. What is the corresponding effective rate?
1. A man wishes to bequeath to his daughter P50T 15 yrs from now. What amount should he invest now if it will earn interest of 10% compounded semi-annually during the first 10 yrs & 12% compounded quarterly during the next 5yrs? 2. Find the nominal rate compounded quarterly which is equivalent to 12% compounded monthly. What is the corresponding effective rate?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 12PROB
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1. A man wishes to bequeath to his daughter P50T 15 yrs from now. What amount should he invest now if it will earn interest of 10% compounded semi-annually during the first 10 yrs & 12% compounded quarterly during the next 5yrs?
2. Find the nominal rate compounded quarterly which is equivalent to 12% compounded monthly. What is the corresponding effective rate?
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