Complete each problem in excel. Submit your excel worksheet in EXCEL format so I can see how you solved the problems. Please MARK or Outline your answers so I can tell where they are.

Problem 1

You had some unexpected expenses so you are considering working with a questionable lender.

The loan is for $970 and you pay it back 17 days later.

You would have to pay back $1400 at the end of the 17 days.

Assume the company compounds interst every 17 days.

1a. What is the effective interst rate per year?

1b. What would you owe if you kept the money for 1 year?

Problem 2

The lender seems like a bad idea based on the rates and amounts you calculated in problem 1.

Instead, perhaps you will just get another credit card because you keep getting offers in the mail.

BUT You never want to pay more than 10.2% effective interest rate per year.

The card company offers two variations.

2a. What would be the APR (Nominal rate per year) if the card compounds every quarter?

2b. What would be the APR (Nominal rate per year) if the card compounds day?