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 quarter for 5 years, starting a quarter from today. How much is each of the quarterly payments?

Problem #3d: Compare the annual payment from 3b with the quarterly payment from 3c, what can you find? (Hint: Use N = 4, I = 12, PV = 0, PMT = quarterly payment from 3c, FV = ???)