Contract Crediting Rate Formula
Hi,
I'm stuck on backing into the gross crediting rate (1.93%). I have all the variables and the formula but I can't come up with the answer that is provided. I'm trying to find the gross crediting rate of a contract with the formula
Gross crediting rate = (MV/CV)^(1/D)*(1+AYTM)1;
MV = market value
CV = contract value
D = duration
AYTM = annualized yield to maturity = (1+ YTM/2)^21
Inputs
Market Value  48,000,000.00 
Contract Value  50,000,000.00 
MV/CV  96.0% 
Duration  3.0 years 
Yield to Maturity  3.30% 
Annualized Yield to Maturity  3.33% 
Gross Crediting Rate  1.93% 
If I step through the formula
(MV/CV) = .96
(1/D)=.33 (.96)^.33 =.9866
(1+AYTM) = (1+.333) = 1.333
(.9866)* 1.333=1.31
1.31  1= .31
I'm not getting something right where I'm coming up .31 and the solution has 1.93; any suggestions?
The other part I'm stuck on is how AYTM=3.33 when (1+.33\)^21=.7689
I appreciate the input!
Answer
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Thankyou! I made a rookie oversight. Greatly appreciate the help
The answer is accepted.
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