You borrow $9,500 at 14% per year and will pay off the loan in three equal annual payments with the first occurring at the end of the fourth year after the loan is made. The three equal annual payments will be $6,062.4. Which of the following is true for your first payment at the end of year 4?
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- When computed using an effective interest rate of i, it is known that the present value of $2,000 at the end of each year for 2n years plus an additional $1,000 at the end of each of the first n years is $52,800. Using this same interest rate, the present value of an n year deferred annuity-immediate paying $4,000 per year for n years is $27,400. Find n. [HINT: First find an|i and a2n|i then νn and i.]a. What is the effective annual interest rate if the nominal annual interest rate is 10%, compounded quarterly? b. What is the effective annual interest rate if the nominal annual interest rate is 10%, compounded monthly? c. What is the effective annual interest rate if the nominal annual interest rate is 10%, compounded daily? d. What is the effective annual interest rate if the nominal annual interest rate is 10%, compounded continuously? e. At what compounding period does the effective annual interest rate very closely approximate continuous compounding? (Consider to the nearest 0.0001)Investments Jack invests $1000 at a certain annual interest rate, and he invests another $2000 at an annual rate that is one-half percent higher. If he receives a total of $190 interest in I year, at what rate is the $1000 invested?
- If you borrow $4,000, what single payment must you make after 5 years to repay the principal and interest at 10%? Alternatively, what uniform annual payment would be required? 2. The interest rate charged on a small loan is 1.5% per month. What are the corresponding 'nominal' and 'effective' rates per annum? 3. Using the interest rate of 3% compounded annually, what is the amount that will be accumulated in a sinking fund at the end of 15 years if $200 is deposited in the fund at the beginning of each of the 15 years if $200 is deposited in the fund at the beginning of each of the 15 years?If a lender makes a simple loan of $400 for 3 years and charges 5%, then the amount that the lender receive at maturity is $ If a lender makes a simple loan of $2000 for one year and charges $110 interest, then the simple interest rate on that loan is (Round your response to the nearest two decimal place) If a borrower must repay $106.50 one year from today in order to receive a simple loan of $100 today, the simple interest on this loan is s %. (Round your response to the nearest whole number) O A. 6.0% O B. 65% O C. 6.5% O D. 5.0% wwww www NextQUESTION 1 Muhammad takes out a loan of $ 2,130, at 8% simple interest, for 8 years. How much will he pay back at the end of year 8? QUESTION 2 Calculate the amount of interest on an investment of AED 103,971 at 8% simple interest for 5 years. QUESTION 3 If you deposit today $7,335 in an account for 6 years and at the end accumulate $10,885, how much compound interest rate (rate of return) you earned on this investment ? QUESTION 4 You will deposit 12,025 at 10% simple interest rate for 9 years, and then move the amount you would receive to an investment account at 12 % compound rate for another 3 years. How much money would you have at the end of the entire period ?
- Addy plans to deposit her annual bonus into a savings account that pays 4% interest compounded annually. The size of her bonus increases by $1000 each year, and the initial bonus amount she will deposit at the end of year 1 is $2500 a) Determine how much will be in the account immediately after the 6th deposit. b) What's the future value if she only plans to deposit her annual bonus for 8 years C) What's the future value if she only plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8 but also plans to skip the deposits at the end of vears 3 and 6?Use interest tables. Suppose that $1,000 is invested for 4 years at an interest rate of 12%, compounded quarterly. How much will be in the account at the end of 4 years? Choose an answer by clicking on one of the letters below, or click on "Review topic" if needed. A F = $1,000 (F/P,12%,4) = $1,000 (1.574) = $1,574 B F = $1,000 (F/P,12%,16) = $1,000 (6.130) = $6,130 C F = $1,000 (F/P,3%,4) = $1,000 (1.126) = $1,126 D F = $1,000 (F/P,3%,16) = $1,000 (1.605) = $1,6052. 3. You borrow $80,000 at 5.00% per year and will pay off the loan in equal payments starting one year after the loan is made over a period of ten years. What are the annual end-of-year payments? Determine the amount of interest and principal that are paid each year. What is the total interest paid for the loan? A distillation column is designed, purchased and installed for a cost of $? 6 million Tha
- One bank advertises an interest rate on a certificate of deposit (CD) to be 4 % compounded daily. Another bank advertises a CD with a 4.1% effective annual rate. The principal deposited is $ 1000 for this problem. At 4% compounded daily: F4= At a 4.1% effective annual rate: F4 = In which CD would you earn the most money in 4 years? CD with given effective interest rate O CD compounded daily at given interest rateFind the value of the unknown quantity, Po that establishes equivalence in the cash-flow diagram below. Suppose į = 12% per year. Use an annuity factor, a uniform gradient factor and geometric gradient series in your solution. $1,400 f=10% $1,100 $900 $800 $500 1 2 3 4 5 6 7 8 9 10 11 12 13 EOY Po=?Suppose that under the Plan of Repayment one should pay off the debt in a number of equal end-of-month installments (principal and interest). This is the customary way to pay off loans on automobiles, house mortgages, etc. A friend of yours has financed $15,000 on the purchase of a new automobile, and the annual interest rate is 6% (0.5% per month). a. Monthly payments over a 36-month loan period will be how much? b. How much interest and principal will be paid within three month of this loan?