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Please show all work (Indicate formula or calculator inputs used) 1. More about Annuities Number of Time Periods and Payments a) Suppose you borrow $2,000
Please show all work (Indicate formula or calculator inputs used) 1. More about Annuities Number of Time Periods and Payments a) Suppose you borrow $2,000 at 5%, and you are going to make annual payments of $734.42. How long before you pay off the loan? b) Suppose you want to borrow $20,000 for a new car. You can borrow at 8% per year, compounded monthly (8/12 = .66667% per month). If you take a 4 year (48 months) loan, what is your monthly payment? 2. Interest Rates: APR and EAR a) You are deciding between two savings accounts. You can earn 1% per month with Bank A or you can earn 3% per quarter with Bank B if you invest today. What is the APR for each account? What is the EAR for each account? Which bank should you chose
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