What is the effective annual interest rate for an asset

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1. What is the Effective Annual Interest Rate for an asset that is purchased on December 15, 2015 for $875 and sold 27 months later (on March 15, 2018) for $1,099?

2. A bond pays interest on a semi-annual basis and has a coupon rate of 9%.

The interest is paid on April 1 and October 1 of each year.

If it is currently July 3, how much interest has accrued since the last interest payment?

3. What is the effective rate on a hypothetical investment that has a nominal rate of 7.9%, but it is CONTINUOUSLY compounded?

Reference no: EM131445260

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