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#1 2013-02-20 07:31:08

vatso
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Effective Annual Rate

If the effective weekly rate is 0.12%, the effective annual rate is? The correct answer is 6.43%. How you get this value? Thank you in advance!!!

#2 2013-02-20 14:25:21

bobbym
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Re: Effective Annual Rate

Hi vatso;

Experimentally, take a nice round figure of money like 100 dollars. Form the recurrence



with a(0) = 100 of course. Run it forward for 52 iterations, you get 106.43481. That is equal to an effective annual interest rate of 6.43 %.

Or use the formula

Last edited by bobbym (2013-02-20 14:28:20)


In mathematics, you don't understand things. You just get used to them.
I have the result, but I do not yet know how to get it.
All physicists, and a good many quite respectable mathematicians are contemptuous about proof.

#3 2013-02-21 00:43:17

vatso
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Re: Effective Annual Rate

Thank you Bobbym!!!!!!!!!

#4 2013-02-21 00:54:17

bobbym
Administrator

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Re: Effective Annual Rate

Hi;

Come back if you need more.


In mathematics, you don't understand things. You just get used to them.
I have the result, but I do not yet know how to get it.
All physicists, and a good many quite respectable mathematicians are contemptuous about proof.

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