PLEASE, WRITE THE SOLUTIONS ON PAPER, EXPLAINING THE ENTIRE PROCESS, THE ONLY AND CORRECT SOLUTIONS ARE FOR (i) I = £20.55 AND (ii) d = 5.81% pa AND (iii) d^12 = 5.97% pa A short-term loan of £5,000 is repayable in 25 days at a simple rate of interest of 6% p.a. Assuming that 1 year is equivalent to exactly 365 days, calculate the following: (i) The amount of interest, to the nearest £0.01, accrued on the loan in 25 days; (ii) The annual effective rate of discount equivalent to this transaction, to the nearest 0.01%; (iii) The annual nominal rate of discount convertible monthly equivalent to this transaction, to the nearest 0.01%.
PLEASE, WRITE THE SOLUTIONS ON PAPER, EXPLAINING THE ENTIRE PROCESS, THE ONLY AND CORRECT SOLUTIONS ARE FOR (i) I = £20.55 AND (ii) d = 5.81% pa AND (iii) d^12 = 5.97% pa A short-term loan of £5,000 is repayable in 25 days at a simple rate of interest of 6% p.a. Assuming that 1 year is equivalent to exactly 365 days, calculate the following: (i) The amount of interest, to the nearest £0.01, accrued on the loan in 25 days; (ii) The annual effective rate of discount equivalent to this transaction, to the nearest 0.01%; (iii) The annual nominal rate of discount convertible monthly equivalent to this transaction, to the nearest 0.01%.
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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PLEASE, THE ONLY CORRECT ANSWERS ARE THE STIPULATED ONES
Transcribed Image Text:PLEASE, WRITE THE SOLUTIONS ON PAPER, EXPLAINING THE ENTIRE PROCESS, THE ONLY AND
CORRECT SOLUTIONS ARE FOR (i) I = £20.55 AND (ii) d = 5.81% pa AND (iii) d^12 = 5.97% pa
A short-term loan of £5,000 is repayable in 25 days at a simple rate of interest of 6% p.a.
Assuming that 1 year is equivalent to exactly 365 days, calculate the following:
(i) The amount of interest, to the nearest £0.01, accrued on the loan in 25 days;
(ii) The annual effective rate of discount equivalent to this transaction, to the nearest 0.01%;
(iii)
The annual nominal rate of discount convertible monthly equivalent to this transaction, to
the nearest 0.01%.
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