#2

Problem 1 D. Trump is negotiating to purchase a car, and he determines that he must borrow 12,000$ to complete the purchase. He is offered financing at a nominal interest rate of i(12) with monthly payments beginning one month after the loan is made. He can repay the loan over a 2-year period(24 payments) at 592.15 per month, or over a 3-year period (36 payments) at 426.64 (same interest rate). Find (12) and the monthly amount payable if he were able to repay the loan over a 4-year period. Problem 2 At an annual effective interest rate of i, i > 0 the present value of a perpetuity paying 10 at the end of each 3-year period, with the first payment at the end of year 6, is 32. At the same annual effective rate of i, the present value of a perpetuity-immediate paying 1 at the end of each 4-month period is X. Calculate X