Question

In: Finance

A woman invested $400,000 in the stock market. Twenty years later she received $500,000. If interest...

A woman invested $400,000 in the stock market. Twenty years later she received $500,000. If interest is computed every three months, determine the nominal rate earned on the investment.

Solutions

Expert Solution

quarterly rate

=(500000/400000)^(1/(20*4))-1

=0.2793%

the nominal rate earned on the investment

=0.2793%*4

=1.12%


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