17) What is the present value of a series of $4000 payments at the end of each y

Question

17)

What is the present value of a series of $4000 payments at the end of each year for 7 years at 6% compounded annually?

18) If $24,725 is the loan pay off after 1 year and 6 months for a $23,000 loan, what was the simple annual interest rate charged?

19)

Which interest rate, when compounded, has the largest effective annual interest rate?

36% per year

20)

Which interest rate, when compounded, has the largest effective annual interest rate?

36% per year

21) An interest rate is 1% per quarter. What is the effective annual interest rate?

22) Determine the breakeven resale price 15 years from now of an apartment house that can be bought today for $549,000. Its annual net income is $64,000. The owner wants a 10% annual return on her investment.

9% per quarter 3% per month 20% per semiannual period

36% per year

20)

Which interest rate, when compounded, has the largest effective annual interest rate?

9% per quarter 3% per month 20% per semiannual period

36% per year

Explanation / Answer

1. Using the formula: PV = FV/(1+i)^n

The answer will be PV = $2660.23

2. Using the formula: A-P = (P.r.t)/100

The answer will be r = 5%

3. Using the formula: Effective annual interest rate = (1+r/m)^m

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.