Unformatted text preview: an annual eﬀective rate of interest 4.5%. Q6. A loan of $30,000 is repaid by 32 monthly payments of $1,000 in arrears plus a ﬁnal smaller payment. Using a interest rate of 6% compounded monthly determine the ﬁnal payment. Q7. A debt of $20,000 will be paid oﬀ by the monthly payments of $1,000 at the end of each month at a nominal interest rate of 7.2% per year, compounded monthly. Find the number of level payments needed and the amount of the ﬁnal smaller payment if it is made one month after the last level payment. Q8. Thierry plans to accumulate a fund for a retirement by depositing $3,000 at the beginning of each year for 25 years. Starting at the 26th year he can make 15 level withdrawals at the beginning of each year so as to deplete the fund. Assuming that all payments are level, ﬁnd the amount of the annual withdrawal, if the eﬀective rate of interest is 8% during the ﬁrst 25 years but only 7% thereafter. 1...
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 Winter '09
 Chisholm
 Debt, Nominal Interest Rate, monthly payments, smaller payment

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