Mr. Sansomewithdrew $1000from a savingsaccountand invested
Chapter , Problem 3-47(choose chapter or problem)
Mr. Sansomewithdrew $1000from a savingsaccountand invested it in common stock. At the end of 5years, he sold the stock and received a check for$1307. If Mr. Sansome had left his $1000 in the sav-ings account, he would have received an interest rateof 5%, compounded quarterly. Mr. Sansome wouldlike to compute a comparable interest rate on hiscommon stock investment. Based on quarterly com-pounding, what nominal annual interest rate did Mr.Sansome receive on his investment in stock? Whateffective annual interest rate did he receive?
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