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2. Suppose the interest rate is 9.1% APR with monthly compounding. What is the present value of an annuity that pays $120 every three months
2. Suppose the interest rate is 9.1% APR with monthly compounding. What is the present value of an annuity that pays $120 every three months for seven years?
3. You have just taken out a $21,000 car loan with a 8% APR, compounded monthly. The loan is for five years. When you make your first payment in one month, how much of the payment will go toward the principal of the loan and how much will go toward interest?(Note: Be careful not to round any intermediate steps less than six decimal places.)
Suppose the term structure of interest rates is shown below: 1 year 2 years 3 years 5 years 10 years 20 years Term Rate (EAR%) 5.00% 4.80% 4.60% 4.50% 4.25% 4.15% Consider an investment that pays $1,900 certain at the end of each of the next four years. If the investment costs $6,650 and has a net present value (NPV) of $138, then the four year risk-free interest rate is closest to: A. 3.58% B. 5.08% O C. 4.08% O D. 4.58%Step by Step Solution
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