What compound interest rate j,, is equivalent over 4-year period to a simple interest rate of 2.24 % the first year followed by a simple discount rate of 7.41 % for the next 3 years ? Answer: 0.0573

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 8MC: Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future...
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What compound interest rate j,, is equivalent over 4-year period to a simple
interest rate of 2.24 % the first year followed by a simple discount rate of 7.41
% for the next 3 years ?
Answer: 0.0573
Transcribed Image Text:What compound interest rate j,, is equivalent over 4-year period to a simple interest rate of 2.24 % the first year followed by a simple discount rate of 7.41 % for the next 3 years ? Answer: 0.0573
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