Finance
Calculator The interest conversion function can be used when either the nominal interest rate is given, and the annual effective interest rate is needed, or when the annual effective rate is given and the nominal rate is needed. To use this function, begin by pressing 2^{nd} IConv (above #2 key), and then 2^{nd} CLR Work (bottom row first column) to erase any old material. a. A certificate offers a nominal interest rate of 5% with quarterly compounding. What is the annual effective interest rate?
This process can be reversed, for example, to find the Nominal rate when the Effective rate is given. b. A certificate offers an annual effective interest rate of 6% with quarterly compounding. What is the nominal interest rate?
Last Updated on 1 May 2002, e-mail any comments to: robert.balik@wmich.edu |