Question

Interest rates are expected to be 10% for the next 3 years and then to fall to 8% for the following 3 years. How much will an investment of Rs. 3,000 be worth at the end of 6 years?

Answer 1

Below is a breakdown of the results of these different compound periods with a 10% nominal interest rate: Semi-annual = 10.250% Quarterly = 10.381% Monthly = 10.471%