Question
Q 1: You borrow $180,000; the annual loan payments are $9,183.47 for 30 years. What interest rate are you being charged? Round your answer to
Q 1: You borrow $180,000; the annual loan payments are $9,183.47 for 30 years. What interest rate are you being charged? Round your answer to the nearest whole number.
Q2: Find the future values of the following ordinary annuities:
2a: FV of $600 paid each 6 months for 5 years at a nominal rate of 11% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.
2b: FV of $300 paid each 3 months for 5 years at a nominal rate of 11% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.
2c: These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?
c. These annuities receive the same amount of cash during the 5-year period and earn int rate vet the annulitv in nart h ende un larrer than the nne in nart a Whv dnec thic nerul -Select- The nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a). The annuity in part (a) is compounded less frequently; therefore, more interest is earned on previously-earned interest. The annuity in part (a) is compounded more frequently; therefore, more interest is earned on previously-earned interest. The annuity in part (b) is compounded less frequently; therefore, more interest is earned on previously-earned interest. The annuity in part (b) is compounded more frequently; therefore, more interest is earned on previously-earned interestStep by Step Solution
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