3. A perpetuity costs 693.16 and makes end-of-month payments. The per- petuity pays 1 at...
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3. A perpetuity costs 693.16 and makes end-of-month payments. The per- petuity pays 1 at the end of each month of year 1, 2 at the end of each month of year 2, ..., 10 at the end of each month of year 10. After year 10, the payments remain constant at 10. Calculate the annual effective interest rate. (a) 8.30% (b) 9.38% (C) 10.47% (d) 11.57% (e) 12.68% 3. A perpetuity costs 693.16 and makes end-of-month payments. The per- petuity pays 1 at the end of each month of year 1, 2 at the end of each month of year 2, ..., 10 at the end of each month of year 10. After year 10, the payments remain constant at 10. Calculate the annual effective interest rate. (a) 8.30% (b) 9.38% (C) 10.47% (d) 11.57% (e) 12.68%
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