1After reading the fine print in your credit card agreement, you find that the "low" interest rate is actually an 17.05% APR, or 1.4208% per month. What is the effective annual rate? a. 18.45% b. 19.41% c. 18.82% d. 19.56% 2A zero-coupon bond is a bond that pay no interest payment. You buy the bond at a discount from the face value ($1000) and are paid the face amount when the bond matures. A zero-coupon bond that will pay $1,000 in 10 years is selling today for $422.41. What interest rate does the bond offer? a. 7% b. 10% c. 9% d. 8% 3How long must one wait (to the nearest year) for an initial investment of $3,000 to triple in value if the investment earns 6.5% compounded annually? a. 22.01 years b. 9.81 years c. 17.45 years d. 25.00 years
1After reading the fine print in your credit card agreement, you find that the "low" interest rate is actually an 17.05% APR, or 1.4208% per month. What is the effective annual rate? a. 18.45% b. 19.41% c. 18.82% d. 19.56%
2A zero-coupon bond is a bond that pay no interest payment. You buy the bond at a discount from the face value ($1000) and are paid the face amount when the bond matures. A zero-coupon bond that will pay $1,000 in 10 years is selling today for $422.41. What interest rate does the bond offer? a. 7% b. 10% c. 9% d. 8%
3How long must one wait (to the nearest year) for an initial investment of $3,000 to triple in value if the investment earns 6.5% compounded annually? a. 22.01 years b. 9.81 years c. 17.45 years d. 25.00 years
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