Calculating Monthly Discount Rate
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Questions and Answers

Which one of the following options is the correct monthly discount rate expressed as a nominal annual rate?

  • 8.04%
  • 4.06%
  • 6.88% (correct)
  • 0.50%

    • What is the correct future value of the investment after 4.25 years, considering the monthly discount rate expressed as a nominal annual rate?

  • $175,000
  • $186,250
  • $178,663.58 (correct)
  • $182,500

    • What is the correct period of time, in years, over which the future value of $182,500 is reduced to $178,663.58?

  • 4 years
  • 5 years
  • 4.25 years (correct)
  • 3.5 years

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