Question
QUESTION 1 The recorded session provides a good overview on calculating this problem. Use the A Number of Useful Financial Spreadsheets to find a sample
QUESTION 1 The recorded session provides a good overview on calculating this problem. Use the "A Number of Useful Financial Spreadsheets" to find a sample template you can use to work this problem. The problem you will answer has the following fact pattern: Fred, the accountant for XYZ Company forgot to pay a credit card payment that was due in the amount of $575. He noticed it exactly 1 month later when he was making the monthly payment. The late fee charged as $35. If you consider the $35 late fee a charge for the month of interest on the $575, what APR did the company pay because of Fred's mistake? Use monthly compounding and carry your answer two decimal points. (76.25% would be entered 76.25) Question 2 What would the Effective Annual Rate paid by the company based on th $35 late fee? Use monthly compounding and carry your answer two decimal points. (76.25% would be entered 76.25) Question 3 Your insurance premium for your autos are due and you have two options: Option 1 - Pay the full amount of $1,200 now. Option 2 - Pay $205 now and 5 monthly payments of $205 with the first payment starting in a month. What is the APR you are actually paying if you choose the installment Option 2? Use monthly compounding and carry your answer two decimal points. (76.25% would be entered 76.25) Question 4 What would the Effective Annual Rate be if you pursued the installment option? Use monthly compounding and carry your answer two decimal points. (76.25% would be entered 76.25)
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