Question Details: Basima currently has $9,500 at an investment bank. She began investing 8 years ago at 6% Annual Percentage Rate (APR) or quoted rate. About 2 years ago, Basima began her full-time employment and could have contributed a lumpsum amount of $2,300 at the end of year 7 and another lumpsum amount of $3,200 at the end of year 8.
d) If Basima wished to double her current account value $9,500 within the next 9 years, what rate of APR from the bank would satisfy her goal? (show timeline)
e) Another local investment bank has offered her an interest rate of 10% APR compounded monthly. Calculate the Effective Annual Rate (EAR) and the Effective Periodic Rate (EPR) if Basima were to invest bi-weekly (every 2 weeks).
APR, EAR and ERP question about investment?rate my professor
EAR is [1+(APR/n)]^n where n= number of times compounded a year.
EAR= [1+.(1/12)]^12= 10.4713%
EPR is [1+EAR]^(1/26)-1=0.383756%
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