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FinanceQ&A LibraryYour company has decided to set up a fund for its employees with an initial payment of Rs 27,500 compounded six-monthly over a four-year period at a six monthly interest of 3.5%.(a) Calculate the size of the fund at the end of 4 years.(b) Calculate the effective annual interest rate.iv) Show that P = A/r. for an ordinary annuity to infinity.Question

Asked Nov 5, 2019

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Your company has decided to set up a fund for its employees with an initial payment of Rs 27,500 compounded six-monthly over a four-year period at a six monthly interest of 3.5%.

(a) Calculate the size of the fund at the end of 4 years.

(b) Calculate the effective annual interest rate.

iv) Show that P = A/r. for an ordinary annuity to infinity.

Step 1

a.

Calculate the size of the fund as follows:

Step 2

b.

Calculate the effective annu...

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