Time Value of Money
If 10% nominal annual interest is compounded daily, what is the effective annual interest rate? Solution: i e = (1+r/m)m -1 = (1+0.10/365)365 -1 = 0.1052 = 10.52% An individual wishes to deposit a certain quantity of money now so that he will have $500 at the end of five years. ................
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