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Ch.5 Practice

# Ch.5 Practice - the loan 3 Ricky Rip-off’s Pawn Shop...

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FIN 3100 Chapter 5 Practice Dr. Lucy Ackert 1. You own an asset that had a total nominal return last year of 13 percent. If the inflation rate was 4.1 percent, what was your real return? 2. Prepare an amortization table for a three-year loan of \$75,000. The interest rate is 9% per year and the terms of the loan call for equal annual payments. How much interest is paid in the third year? How much total interest is paid over the life of
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Unformatted text preview: the loan? 3. Ricky Rip-off’s Pawn Shop charges a rate of 20% per month. What is the APR? What is the EAR? 4. What is the EAR for a 9% loan when interest is compounded quarterly? 5. What is the APR of a loan that has an EAR of 16% when interest is compounded daily?...
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