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Question: Jack deposited $500,000 into a bank for 6 months. At the end of that time, he withdrew the money and received $525,000. If the bank paid interest based on continuous compounding:

(a) What was the effective annual interest rate?

(b) What was the nominal annual interest rate?

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Darryn D'Souza
Darryn D'SouzaLv10
28 Sep 2019

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True or False? Provide an explanation for each true or false question, so I can understand it!

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I need help with the following true/false questions (+explanation) that I need to know for the exam.

True or False? Provide an explanation for each true or false question, so I can understand it!

1. Simple interest is based on the time value of money principle.

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