document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1098198>Question 1098198</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Suppose that over a six-year period ,1,000 dollars accumulated to 1,959 dollars in an investment certificate in which interest was compounded quarterly.<BR>\n" );
document.write( "(a)Find the nominal rate of interest, compounded quarterly, that was earned. (Round your answer to 2 decimal places.)    <BR>\n" );
document.write( "(b)	Find the effective annual rate (EAR) rounded to 2 decimal places. \r<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #713801 by </B><A HREF=/tutors/aboutme.mpl?userid=jorel1380><B>jorel1380(3719)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=jorel1380><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=jorel1380><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=713801\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> (a)To solve this, we need:<BR>\n" );
document.write( "1959=1000*(1+r/4)^(4*6)<BR>\n" );
document.write( "1.959=(1+r/4)^24<BR>\n" );
document.write( "ln 1.959=ln (1+r/4)^24=24 ln (1+r/4)<BR>\n" );
document.write( "ln (1+r/4)=0.02801808912343348753142591433615<BR>\n" );
document.write( "e^ln (1+r/4)=1+r/4=e^0.02801808912343348753142591433615=1.0284142873661539848196528368801<BR>\n" );
document.write( "r=.1137 or 11.37%<BR>\n" );
document.write( "(b)(1+.1137/4)^4 -1=1.1185937952418743147625868352589-1=0.1186=11.86% EAR </SPAN>\n" );
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