Asked by Elise Weidman on May 21, 2024
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After 10½ years of contributions of $2,000 at the end of every six months to an RRSP, the accumulated amount stood at $65,727.82. What semi-annually compounded nominal rate and effective annual rate of return were earned by the funds in the RRSP?
Semi-annually Compounded
Relating to the process in which the interest on a loan or investment is calculated and added to the principal amount twice a year.
Effective Annual Rate
A measure of the true interest rate accounting for the effects of compounding over a year.
Contributions
Amounts given or donated to a particular cause, project, or for a retirement account.
- Gain the ability to assess the profitability on a variety of financial instruments and loans.
- Comprehend the variance between nominal and effective interest rates.
- Deploy financial metrics to design strategies for retirement and investment aims.
Verified Answer
Learning Objectives
- Gain the ability to assess the profitability on a variety of financial instruments and loans.
- Comprehend the variance between nominal and effective interest rates.
- Deploy financial metrics to design strategies for retirement and investment aims.
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