Homework Answers
FV = PV (1+r)
r is Int Rate per 4 months
(1+r) = 5700000 / 5571606
= 1.0230
r = 1.0230 - 1
= 0.0230 i.e 2.30%
EAR = (1+r)^n - 1
r is Int Rate per 4 Months and n is no. of 4 Months per anum
= ( 1 + 0.0230)^3 - 1
= (1.0230^ 3 ) - 1
= 1.0707 - 1
= 0.0707 i.e 7.07%
EAR is 7.07%
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