Asked by Brittany Whitworth on May 30, 2024

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Belleville Credit Union has established interest rates on its three-year GICs so that the effective rate of interest is 4% on all three compounding options. What are the monthly, semiannually, and annually compounded rates?

Effective Rate of Interest

The real rate of interest earned or paid over a period, considering compounding.

Compounded Options

Compounded options are not a standard financial term, suggesting a mix-up or confusion with terms related to compound interest or options trading. NO.

GICs

In Canada, Guaranteed Investment Certificates represent an investment option guaranteeing a fixed return rate over a certain time frame.

  • Determine and contrast the effective annual yields given disparate compounding periods.
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MB
mellissa brownJun 02, 2024
Final Answer :
3.93% compounded monthly; 3.96% semiannually; 4% annually