Question
1.What is the value of a perpetuity that pays $100 every 6 months forever? The interest rate quoted on an APR basis is 5.3%. a.Value
1.What is the value of a perpetuity that pays $100 every 6 months forever? The interest rate quoted on an APR basis is 5.3%.
a.Value of a perpetuity
2. You borrow $1,000 from the bank and agree to repay the loan over the next year in 12 equal monthly payments of $90. However, the bank also charges you a loan initiation fee of $19, which is taken out of the initial proceeds of the loan. What is the effective annual interest rate on the loan, taking account of the impact of the initiation fee?
a.What is the effective annual interest rate?
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Pricing Analytics Models And Advanced Quantitative Techniques For Product Pricing
Authors: Walter R. Paczkowski
1st Edition
1138623938, 9781138623934
