INTEREST RATE 10%

timeline 0 1 2 3 4 5 6 7 8

RD $ (10,000.00) $ (10,000.00) $ (10,000.00) $ (10,000.00) $ (10,000.00) $ (10,000.00) $ (10,000.00) $ (10,000.00)

1 Payments made at the end of the year, compounded annualy $159,374.25 -$61,445.67

2 Payments made at the beginning of the year, compounded annualy $175,311.67

TWO POSSIBILITIES TWO POSSIBILITIES
3 Effective Interest rate End year payments Beginning year payments
Compounded annualy 1 10.00% $159,374.25 $159,374.25 $175,311.67
i Compounded half yearly 2 10.25% $161,297.34 $163,033.66 $177,830.31
ii Compounded quaterly 4 10.38% $162,317.40 $166,335.98 $179,168.04
iii Compounded monthly 12 10.47% $163,020.87 $169,057.81 $180,091.28
iv Compounded daily 365 10.51558% $163,368.06 $173,492.56 $180,547.15
v Compounded continuously 10.51709% $163,379.94 $180,562.76

0.1025
 9 10

$ (10,000.00) $ (10,000.00)

O POSSIBILITIES
eginning year payments
$175,311.67 $669,371.83
$347,192.52
$690,876.17
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