1. The return of an investment is given in the following table: Year Balance 0 RM5000 1 RM5375 2 RM5697.50 3 RM5925.40 (a) Find the effective rate of interest for each of the three years. (b) (c) Find the equivalent level effective rate of return over the three-year period. If a principal of RM7000 is invested at time t = 0, calculate the balance of the investment after 3 years.
1. The return of an investment is given in the following table: Year Balance 0 RM5000 1 RM5375 2 RM5697.50 3 RM5925.40 (a) Find the effective rate of interest for each of the three years. (b) (c) Find the equivalent level effective rate of return over the three-year period. If a principal of RM7000 is invested at time t = 0, calculate the balance of the investment after 3 years.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 22P
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