Annual effective rate of interest


You are given a loan on which interest is charged over a three year period, as follows:

1) An effective rate of discount of 6% for the first year;

2) A nominal rate of discount of 5% compounded every two years for the second year;

3) A nominal rate of interest of 5% compounded semiannually for the third year.

Calculate the annual effective rate of interest over the three year period.

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Basic Statistics: Annual effective rate of interest
Reference No:- TGS0747756

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