After 12 ½ Years Contributions of $750 at the End

question 89

Multiple Choice

After 12 ½ years contributions of $750 at the end of each semi-annual period has accumulated into $24,510.47. If interest rate is compounded semi-annually, determine the effective annual rate of the investment.

• A) 8.08%
• B) 8.62%
• C) 9.08%
• D) 9.58%
• E) 10.08%

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Definitions:

Category

A classification or grouping based on common characteristics or types, used to organize items or concepts for easier analysis and comparison.

Funds

Financial resources set aside for a specific purpose or investment vehicle pooling investors’ capital for the purpose of investing in securities and other assets.

Abnormal Return

Returns on a security that differ from the expected rate of return, often adjusted for risk.

Bogey Portfolio

A reference portfolio used to gauge the performance of an investment portfolio.