What is the effective interest rate for the first year

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Reference no: EM131945380

You invest $8,000 for three years in a bank account that generates interest at a rate that is compounded quarterly. The nominal (annual) interest rate is 4% for the first year and 6% for the second and third years.

(a) What is the effective interest rate for the first year?

(b) What is the value of the investment at the end of the three years?

Reference no: EM131945380

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