Question
9. You are offered an investment with a quoted annual interest rate of 6.75% with quarterly compounding of interest. What is your effective annual interest
9. You are offered an investment with a quoted annual interest rate of 6.75% with quarterly compounding of interest. What is your effective annual interest rate?
10. You are offered an annuity that will pay $15,000 per year for 20 years (the first payment will occur one year from today). If you feel that the appropriate discount rate is 3%, what is the annuity worth to you today?
11. If you deposit $6,500 per year (each deposit is made at the end of the year) in an account that pays an annual interest rate of 8%, what will your account be worth at the end of 25 years?
12. You plan to borrow $277,500 now and repay it in 20 equal annual installments (payments will be made at the end of each year). If the annual interest rate is 5.5%, how much will your annual payments be?
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