1st exam study problems #2

1st exam study problems #2 - semi-annually a What is my...

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Study Problems #2 Effective and Nominal Interest 1. I finance a new car under the following terms: Purchase Price: \$31,500 Interest Rate: 7.25% APR compounded monthly Term: 72 months Down Payment: 10% What is the monthly payment? 2. In 1. above, what is the monthly payment if interest is 7% APR compounded quarterly? 3. What nominal interest rate (APR) compounded monthly will grow \$1500 to \$6500 in 4 years if I make quarterly deposits of \$50.00? 4. I make an initial deposit of \$7000 followed by monthly withdrawals of \$50 per month. If the nominal APR is 10.65% compounded
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Unformatted text preview: semi-annually, a. What is my balance in 25 years? b. What is my balance in 25 years if I withdraw \$70 per month instead of \$50 per month? 5. I borrow \$10,000 at an interest rate of 11% APR compounded continuously with monthly payments of \$256.25. Two years from now I can re-finance the then remaining balance @ 10.5% APR compounded quarterly with the same monthly payments. How long would it take (months) to pay the loan down to a \$1000.00 remaining balance from today?...
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