What is the annual nominal rate compounded daily for a bond that has an annual yield of 5.4%? Round

Discussion in 'Calculator Requests' started by math_celebrity, Jan 8, 2017.

  1. math_celebrity

    math_celebrity Administrator Staff Member

    What is the annual nominal rate compounded daily for a bond that has an annual yield of 5.4%? Round to three decimal places. Use a 365 day year.

    Set up the accumulation equation:
    (1+i)^365 = 1.054

    Take the natural log of each side
    365 * Ln(1 + i) = 1.054
    Ln(1 + i) = 0.000144089

    Use each side as a exponent to eulers constant e
    (1 + i) = e^0.000144089
    1 + i = 1.000144099
    i = 0.000144099 or .0144099%
     

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