Question
1. (Example 6-3) What interest rates are implied by the following lending arrangements? a. You borrow $600 and repay $654 in one year. ____________________________________________________________________________________________________________________________________________________________ b.
1. (Example 6-3) What interest rates are implied by the following lending arrangements? a. You borrow $600 and repay $654 in one year. ____________________________________________________________________________________________________________________________________________________________ b. You lend $2,000 and are repaid $2,420 in two years. ____________________________________________________________________________________________________________________________________________________________ c. You lend $1000 and are repaid $1,806.11 in five years with quarterly compounding. __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ d. You borrow $12,500 and repay $21,364.24 in three years under monthly compounding. (Note: In c and d, be sure to give your answer as the annual nominal rate.) ______________________________________________________________________________
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