Mr sansome withdrew amp1000 from a savings account and, Ask an Expert

Economics

Mr. Sansome withdrew &1000 from a savings account and invested it in common stock. At the end of 5 years, he sold the stock for $1207. In the savings account, he would have received an interest rate of 3%, compounded quarterly. He would like to compute a comparable interest rate on his common stock investment. What effective annual interest rate did he receive? Based on quarterly compounding, what nominal annual interest rate did he receive on his investment in stock?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91421078

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