a) Nancy takes a personal loan and will repay the loan by 6 quarterly deposits of $5,000 starting in 6 months. The interest rate is 4% p.a. compounded quarterly. Calculate how much money Nancy borrowed today. (Round your answer to the nearest cent.) b) Gary borrows $50,000 from the bank and he plans to make quarterly repayments of $2,500 starting one year after the borrowing date. The interest rate is 4% p.a. compounded quarterly. Calculate the number of full $2,500 repayments Gary needs to make to repay the loan. c) Daisy borrows money from a bank. She has the following options to repay the loan: Option A: She makes 8 quarterly repayments of $2,500 starting three months after the borrowing date. Option B: She makes a single repayment of $X nine months after the borrowing date. The two repayment options are equivalent at the interest rate of 3% p.a. compounded quarterly. Calculate the amount of $X Daisy needs to repay. (Round your answer to the nearest cent.) (-

a) Nancy takes a personal loan and will repay the loan by 6 quarterly deposits of $5,000 starting in 6 months. The interest rate is 4% p.a. compounded quarterly. Calculate how much money Nancy borrowed today. (Round your answer to the nearest cent.) b) Gary borrows $50,000 from the bank and he plans to make quarterly repayments of $2,500 starting one year after the borrowing date. The interest rate is 4% p.a. compounded quarterly. Calculate the number of full $2,500 repayments Gary needs to make to repay the loan. c) Daisy borrows money from a bank. She has the following options to repay the loan: Option A: She makes 8 quarterly repayments of $2,500 starting three months after the borrowing date. Option B: She makes a single repayment of $X nine months after the borrowing date. The two repayment options are equivalent at the interest rate of 3% p.a. compounded quarterly. Calculate the amount of $X Daisy needs to repay. (Round your answer to the nearest cent.) (-

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 28P

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