Effective Rate of Return for Investment 2
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Investment 1:
Nominal Rate of 9% compounded daily on 365 day year.
Investment 2:
CD that offers $9,000 after 27 months. $7,000 required investment.
If you go with investment #2 by how much will the effective rate of return increase.
** I am able to figure out the EFF of Investment #1 but am having difficulty finding the Effective rate of return on Investment #2.
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The expert examines effective rates of return for investment 2.
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Let the effective rate of return for investment 2 be r. For easy comparison, we will let r be the daily interest rate. Thus n = ...
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