The local bank is currently offering a new investment product, where deposits earn interest according to the following scheme: 4 . An interest rate of r is applied on the 15th day of each month. . A bonus interest rate of this applied on the 30th day of every odd month. (These are the months of January, March, May, July, September, and November.) 1. Suppose that you want to deposit an amount of l' dollars into the account twice: on January 1 and August 1 in 2023. If you want the value of your investment to be S by April 30, 2024, express in terms of S, r, and t. (Note that r and t are not APRs.) 2. What is the effective annual rate of the above compounding scheme?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The local bank is currently offering a new investment product, where deposits earn
interest according to the following scheme:
A
● An interest rate of r is applied on the 15th day of each month.
● A bonus interest rate of t is applied on the 30th day of every odd month. (These
are the months of January, March, May, July, September, and November.)
1. Suppose that you want to deposit an amount of I dollars into the account twice:
on January 1 and August 1 in 2023. If you want the value of your investment to
be S by April 30, 2024, express in terms of S, r, and t.
(Note that r and t are not APRs.)
2. What is the effective annual rate of the above compounding scheme?
Transcribed Image Text:The local bank is currently offering a new investment product, where deposits earn interest according to the following scheme: A ● An interest rate of r is applied on the 15th day of each month. ● A bonus interest rate of t is applied on the 30th day of every odd month. (These are the months of January, March, May, July, September, and November.) 1. Suppose that you want to deposit an amount of I dollars into the account twice: on January 1 and August 1 in 2023. If you want the value of your investment to be S by April 30, 2024, express in terms of S, r, and t. (Note that r and t are not APRs.) 2. What is the effective annual rate of the above compounding scheme?
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