Homework 3 solutions (1)

Homework 3 solutions (1) - Homework 3 Effective and Nominal...

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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? Down Payment $2,620.00 Amount financed $30,130.00 Interest rate per period (month) 0.4600% Future Value is implied to be $0 because the loan is to be paid in full. Months 84 Monthly Payment $433.26 2. In 1. above, what is the monthly payment if the interest rate is 5.52% APR compounded quarterly? Months per year 12 Quarters per year 4 Effective interest rate per year 5.6353% APR compounded monthly 5.4948% Effective rate per month 0.4579% Monthly Payment $432.90 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 ? Months per year 12 Semiannual periods per year 2 Semiannual periods 72 Interest rate per semiannual period 4.2395% APR compounded semiannually 8.4789% Effective rate per year 8.6587% APR compounded monthly 8.3329%
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4. I make an initial deposit of $5,200 followed by withdrawals of $35.00 per month. If the nominal APR is
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Homework 3 solutions (1) - Homework 3 Effective and Nominal...

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