Chapter 2 section 3 - interest rate that Sarah has earned...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 2, Section 3 5. Kunqi takes a loan 4000 with an annual effective interest rate of 4%. The loan is repaid with a payment of P at the end of one year and 2000 at the end of two years. Calculate P. 6. Zach repays a loan of 100,000 with a payment of 60,000 at the end of two years and another payment of 60,000 at the end of 4 years. Determine the effective annual interest rate that Zach pays on his loan. 7. Kim loans Jacqui 5000 so that she can buy a car. The annual effective interest rate on the loan is 8.5%. Jacqui repays the loan with a payments of 2968.27 at time T and at time 2T . Calculate T in months. 8. Sarah has 5000 in her bank account today. Five years ago, she deposited 2000 into her account. Additionally, three years ago, Sarah deposited 2200 into her account. Determine the annual effective
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: interest rate that Sarah has earned over the five year period. 9. Liangchen deposits 1000 into a bank account on January 1, 2011. Liangchen also deposits 300 on October 1, 2011. On December 31, 2011, Liangchen has 1400. Determine the annual effective interest rate earned by Liangchen during 2011. 10. Book Problem 2.3, Number 5. 11. Book Problem 2.3, Number 6. Hint: Find Annes effective annual interest using the cash flow and IRR functionality of your calculator. Put in 0 (zero) for the cash flows at time 1 and 3. Use this interest rate to determine when Frank should make his payment. Answers: 5. 2236.92 6. 6.3326% 7.17 months 8. 4.4847% 9. 9.3239% 10. T = 2.8248 years and T = 2.8649 years 11. 4.5143 years...
View Full Document

This note was uploaded on 02/05/2012 for the course MA 373 taught by Professor Staff during the Spring '08 term at Purdue University-West Lafayette.

Page1 / 2

Chapter 2 section 3 - interest rate that Sarah has earned...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online