Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hi, as you can see in the picture in part C the question ask me to find the rate for the monthly payments. I understand
Hi, as you can see in the picture in part C the question ask me to find the rate for the monthly payments.
I understand I have to convert from APR to the EAR to EPR.
APR is 23% with daily compounding. m=365.
this gives me an EAR of 25.8508846 %
However, from EAR to EPR because they are asking me for MONTHLY payments I used m=12, I don't understand why to use m= 365 when they are asking for monthly payments.
EAT to EPR.1+ 0.258508846 ^ 1/12-1 = 0.002129
Why use 365 for monthly payments? wouldn't that give us a daily rate instead of monthly?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started