1. April has a bank deposit now worth S796.25. A year ago, it was $750. Wna t was the nominal monthly interest rate on her account?
2. You have S50 000 to invest in the stock market and have sought the advice of Adam, an experienced colleague who is willing to advise you, for a fee. Adam has told you that he has found a one-year investment for you that provides 15% interest, compounded monthly.
(a) Wna t is the effective annual interest rate, based on a 15% nominal annual rate and monthly compounding?
(b) Adam says that he will make the investment for you for a modest fee of 2% of the investment's value one year from now. If you invest the S50 000 today, how much will you have at the end of one year (before Adam's fee)?
(c) W nat is the effective annual interest rate of this investment including Adam's fee?