Ross Land has a loan of $8,500 compounded quarterly for four years at 4%. What is the effective interest rate for the loan? Click here to view page 1 of the future value table. Click here to view page 2 of the future value table. The effective interest rate is%. (Round to two decimal places as needed.)
Ross Land has a loan of $8,500 compounded quarterly for four years at 4%. What is the effective interest rate for the loan? Click here to view page 1 of the future value table. Click here to view page 2 of the future value table. The effective interest rate is%. (Round to two decimal places as needed.)
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 31P
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Step 1
Effective rate of Interest-The effective rate means the actual rate of interest which is accrued on investment by the investor, over a given compounding time.
m= 4
i= 4% or 0.04
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