What is effective annual interest rate

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Reference no: EM132072654

1. The required return on a project with conventional cash flows is 15%, the projects return on assets is 17%, and the projects IRR is 12%.

2. What is the effective annual interest rate(EAR) if a bank charged you 10 percent annually (APR) with quarterly compounding?

3. What is the present value of the following 9-year annuities with discount rates of 5%?

a. The annuity grows at 3% per year with the first payment of $10,000 in one year.

c. The annuity grows at -5% per year with the first payment of $10,000 in three years.

Reference no: EM132072654

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