You invested $8,500 at the end of each half-year for 7 years in an investment fund. At the end of year 7, if the balance in the fund was $137,000, what was the nominal interest rate compounded semi-an...
You invested $8,500 at the end of each half-year for 7 years in an investment fund. At the end of year 7, if the balance in the fund was $137,000, what was the nominal interest rate compounded semi-annually?
Homework Answers
Information provided:
Semi-annual investment= $8,500
Time= 7 years*2= 14 semi-annual periods
Future value= $137,000
The nominal interest rate is computed by entering the below in a financial calculator:
PMT= 8,500
N= 14
FV= 137,000
Press the CPT key and I/Y to calculate the nominal interest rate.
The value obtained is 2.13.
Therefore, the nominal interest rate compounded semi-annually is 2.13%.
In case of any query, kindly comment on the solution.
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