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A Discussion On Effective Yields

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Find the effective yields, to the nearest hundredth of a percent, of an investments at 7.25% compounded quarterly and at 7.35% compounded semi annually.

a. 12.66% and 12.72%
b. 4.38% and 4.40%
c. 4.97% and 4.99%
d. 7.45% and 7.49%
e. 11.17% and 11.23%

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Solution Summary

This solution shows how to solve the given effective yield problem.

Solution Preview

The formula for effective yield is:

[1 + (i/n)]n - 1

i is the interest rate expressed ...

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