Problem 5.11: You need another $20,000 for a downpayment on a new home. Your rich uncle is willing to loan you the $20,000, but with the understanding that you will repay him $30,000 in 5 years. You are not sure of the interest rate used, but your uncle has indicated he is using quarterly compounding. If you took this loan, what annual interest rate with quarterly compounding would you be paying on it? PV
Problem 5.11: You need another $20,000 for a downpayment on a new home. Your rich uncle is willing to loan you the $20,000, but with the understanding that you will repay him $30,000 in 5 years. You are not sure of the interest rate used, but your uncle has indicated he is using quarterly compounding. If you took this loan, what annual interest rate with quarterly compounding would you be paying on it? PV
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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am. 42.
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Problem 5.11: You need another $20,000 for a downpayment on a new home. Your rich
uncle is willing to loan you the $20,000, but with the understanding that you will repay him
$30,000 in 5 years. You are not sure of the interest rate used, but your uncle has indicated
he is using quarterly compounding.
Annual
F
G
If you took this loan, what annual interest rate with quarterly compounding would you be
paying on it?
quarterly interest rate
H
J
K
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