Personal Finance Problem 244 Compounding frequency and time value Franois plans to invest $4.000 in...
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Personal Finance Problem 244 Compounding frequency and time value Franois plans to invest $4.000 in an inde vidual savings account USA) at a nominal interest rate of 6%. 1. How much will Franois have in the account after 10 years if interest is com- pounded (1) annually. (2) semiannually, and (3) daily (assuming 365-day yean, b. What is the effective annual rate (EAR for each compounding period in part a 6. How much greater will Franois' ISA balance be if the interest is compounded continously rather than semiannually for the same period d. Conuder your answers in parts a. b, and c. What does it indicate about the rela Bonship between compounding frequency and the compound value for nominal interest rates
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