Homework 3
Effective and Nominal Interest
1.
I finance a car under the following terms:
Purchase Price:
$32,750
Interest Rate:
5.52% APR compounded monthly
Term:
7 years
Required Down Payment:
8.00%
What is the monthly payment?
2.
In 1. above, what is the monthly
payment if the interest rate is
5.52% APR compounded quarterly?
3. What nominal interest rate (APR) compounded monthly
will grow an initial deposit of
$1,800
to
$225,000
in
36 years
if I then make semiannual deposits of
$425.00 ?
4. I make an initial deposit of
$5,200
followed by withdrawals of
$35.00
per month.
If the nominal APR is
9.25% compounded semiannually,
What is my balance in
41 years?
5.
In 4. above, what is my balance in
41 years
if instead I withdraw
$45.00
per month ?
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document6.
I borrow
$62,500
at an interest rate of
5.41% APR compounded continuously
with monthly payments of
$725.00
3.25 years from now I
refinance the remaining balance @
5.02% APR compounded quarterly
with the same monthly payments. How long would it take from the original loan date (months)
This is the end of the preview.
Sign up
to
access the rest of the document.
 Spring '09
 ARNOLD
 Annual Percentage Rate, initial deposit

Click to edit the document details