Effective Annual rates

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June 16, 2015 at 8:10 pm #257355
hemraj123
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Sir, could you please explain how to do this question?
An investment offers one interest payment of 18% at the end of its 4 years life.
June 17, 2015 at 6:33 am #257379
John Moffat
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If the annual rate is R, then (1+R)^4 = 1.18

Therefore R = (fourth root of 1.18) – 1
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