QUESTION 11

1. Suppose Stanley Bank offers to lend you $8,000 for one year at a nominal annual rate of 15.50%, but you must make interest payments at the end of each quarter and then pay off the $8,000 principal amount at the end of the year. What is the effective annual rate on the loan?

   		15.71%
   		15.94%
   		16.42%
   		16.97%
   		17.12%

QUESTION 12

1. What is the present value of the following cash flow stream at a discount rate of 8.0%? Years: 0 1 2 3 CFs: $1000 $2,500 $3,200 $4,200

   		$8,950.84
   		$9,054.25
   		$9,175.14
   		$9,271.20
   		$9,392.39