Answer 1e please (a) A lecturer borrows £10,000 from a bank with an effective interest rate of 3.5% perannum. She pays back the loan after 5 years. How much does she pay back?(b) Determine the AER corresponding to the nominal rate of discount d(12) = 7% perannum.(c) Suppose you are paying off your new fridge by monthly instalments of £25 paid inarrears over five years. Assuming an effective interest rate of 3% per annum, whatwas the price of the fridge?(d) Determine the value of the symbol for an AER of 6%.(e) In return for a loan of £500, a loan shark charges £1 per day payable when theloan is paid back. What is the APR if you pay back the loan and fees after 155days?

The APR is used to measure the interest that a borrower has to pay as an annual percentage of the…

Answered: (e) In return for a loan of £500, a…

(e) In return for a loan of £500, a loan shark charges £1 per day payable when the loan is paid back. What is the APR if you pay back the loan and fees after 155 days?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Answer 1e please

(a) A lecturer borrows £10,000 from a bank with an effective interest rate of 3.5% per
annum. She pays back the loan after 5 years. How much does she pay back?
(b) Determine the AER corresponding to the nominal rate of discount d(12) = 7% per
annum.
(c) Suppose you are paying off your new fridge by monthly instalments of £25 paid in
arrears over five years. Assuming an effective interest rate of 3% per annum, what
was the price of the fridge?
(d) Determine the value of the symbol for an AER of 6%.
(e) In return for a loan of £500, a loan shark charges £1 per day payable when the
loan is paid back. What is the APR if you pay back the loan and fees after 155
days?

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