"APPROXIMATION of INTEREST RATES, COMPOUND INTEREST. The nominalannual rate % of compounding is ANNRATE%, the compounding period in months is CMPERIOD. = 1/30, for daily, = 1 for monthly, =3 for quarterly, =12 for yearly. FREQCONV is the number of compoundings in one year. NPERIODS is number of compounding periods in the term NUMYEARS. RATE%PER is the nominal rate % per compounding period. ACCUMVAL is the value of the PRINCIPL after NUMYEARS of compounding at a nominal annual rate of ANNRATE%. CMPINT is actual interest andEFFRATE% is effective annual interest rate. *** Answers to problems *** (c) PCSCC, Inc., 1993 (a) Set ACCUMVAL=2150, CMPERIOD=6 (6 mo/yr), NUMYEARS=15.5, PRINCIPL=1000. The result is nominal annual rate% must equal 5% (ANNRATE%=5). (b) Set ACCUMVAL=190, CMPERIOD=3 (3 mo/quarter), NUMYEARS=5, PRINCIPL=125. The result is nominal annual rate% must equal 8.46% (ANNRATE%=8.46). Type any key to exit. ||(a) At what nominal rate ANNRATE% compounded semiannually will $1000 grow to $2150 in 15 1/2 years? (b) At what nominal rate ANNRATE% compounded quarterly will $125 result in an accumulated value of $190 in a period of 5 years? Type , to see answers. Type (F2) to return to help file."
