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# a) Your friend deposits \$2,500 into a savings account for 5 years. The account pays 14.1% p.a compounding

quarterly. The equivalent simple interest rate expressed on a per annum basis is is (as a percentage rounded to three decimal places; don't use % sign):????

B) You have the alternative of paying for university fees today for a payment of \$16,000 or, you can select a payment plan where you pay \$7,000 in 11 months from today and another \$10,000 in exactly 24 months from today. If the interest rate is 10.1%p.a. compounding monthly, what is the advantage that the payment plan has over the upfront payment? (expressed in present day value rounded to the nearest cent; do not show \$ sign or comma separators; if the payment plan is more costly than \$16,000 today, your answer will show a negative eg. -300.35)

C) You invested \$1,000 in a savings deposit 5 quarters ago and it has grown to \$1605 today. What nominal rate of annual interest (compounding quarterly) did you earn? (expressed as a percentage to two decimal places; don't use the % sign)

D) Your business will pay you distributions of \$16,000 in 12 months and another \$13,000 in 23 months. If the discount rate is 7% per annum (compounding monthly) for the first 15 months, and 9% per annum (compounding monthly) for the next 8 months, what single amount received today would be equal to the two proposed payments? (answer to nearest whole dollar; do not use \$ sign or commas)

E) Suppose you will receive \$17,000 in 7 months and another \$10,000 in 23 months. If the discount rate is 6% per annum (compounding monthly) for the first 10 months, and 13% per annum (compounding monthly) for the next 13 months, what single amount received today would be equal to the two proposed payments? (answer to the nearest whole dollar; don't include the \$ sign or commas)

A. The effective interest rate is 14.86%. B. The amount is lower than the amount... View the full answer

a. Compounding amount at year end 5 = \$4998.56 Interest... View the full answer

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