Compute the effective interest rate

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Problem 1: Jun P. Inc. deposits money in a bank that pays a 10% interest rate and compounds interest quarterly. Compute the Effective Interest Rate.

A. 10.47%

B. 10.25%

C. 10.95%

D. 10.38%

Problem 2: The Incredible's are planning ahead for their son's education. He's eight now and will start college in 10 years. How much will they have to set aside at the end of each year to have P95,000 in 10 years if the annual interest rate is 7%? (Use 5-decimal Time Value Factor)

A. 5,704.54

B. 6,757.89

C. 5,500.25

D. 6,875.86

Reference no: EM132916676

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