Question
Problem #3: You thought there was no chance the San Francisco 49ers could lose the Super Bowl so you made a large (and legal) bet
Problem #3: You thought there was no chance the San Francisco 49ers could lose the Super Bowl so you made a large (and legal) bet of $50,000. Unfortunately, they lost and now you do not have the $50,000 you owe the casino. The casino charges you 48% APR with quarterly compounding. Problem #3a: What is the Effective Annual Rate the casino charges you?
Problem #3b: You make a deal with the casino that you will pay them 5 equal annual payments (starting a year from today) to clear the debt. How much is each of the 5 payments?
Problem #3c: Alternatively, you decide to pay them a fixed amount every month for 5 years, starting a month from today. How much is each of the monthly payments?
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