1. A store will give you a 5.00% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment due in 1 month. What is the implicit borrowing rate being paid by customers who choose to defer payment for the month? (What is EAR%)

2. What is the value of a perpetuity that pays $100 every 3 months forever? The interest rate quoted on an APR basis is 5.2%

3. Youve borrowed $7,939.58 and agreed to pay back the loan with monthly payments of $280. Assume the interest rate is 9% stated as an APR.

a. How long will it take you to pay back the loan? Number of months ()

b. What is the effective annual rate on the loan? EAR

4. You invest $1,100 at a 12% annual interest rate, stated as an APR. Interest is compounded monthly. How much will you have in 1.5 years? In 2 years?