What is the annual effective interest rate earned

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Reference no: EM132028505

At time t=0, John deposits 1000 into a fund which credits interest at a nominal interest rate of 10% compounded semiannually.

At the same time, he deposits P into a different fund which credits interest at a nominal discount rate of 6% compounded monthly.

At time t=20, the amounts in each fund are equal.

What is the annual effective interest rate earned on the total deposits, 1000 + P, over the 20-year period?

Reference no: EM132028505

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