I Just Gotta Have It, an ice cream company, realizes it needs a short term loan of $50,000. The terms are 5% (.05) annual rate, note payable in6months.

When calculating therEARremember that the exponent is = 12/6 which indicates the number of compounding periods during the year.

Calculate (discount interest):

(4a)Calculate therPER6 monthDISCOUNTinterest:

HINT:

rPER=$amount(interestx# of months / 12) / $amount- ($amount(interestx# of months / 12)

(4b)Calculate therEAR6 monthDISCOUNTinterest:

HINT:

rEAR= (1+rPER) - 1